UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

COMMISSION FILE NUMBER: 000-26076

SINCLAIR BROADCAST GROUP, INC.

(Exact name of Registrant as specified in its charter)


Maryland						52-1494660
(State or other jurisdiction of Incorporation or organization)						(I.R.S. Employer Identification No.)

10706 Beaver Dam Road

Hunt Valley, Maryland 21030

(Address of principal executive office, zip code)

(410) 568-1500

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Class A Common Stock, par value $ 0.01 per share

SBGI

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such file).

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.


						Number of shares outstanding as of
Title of each class						May ~~6, 2021~~5, 2022
Class A Common Stock						~~51,554,363~~46,926,296
Class B Common Stock						23,775,056

Table of Contents

PART I. FINANCIAL INFORMATION

Table of Contents

SINCLAIR BROADCAST GROUP, INC.

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, ~~2021~~2022

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION			32

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)			3

CONSOLIDATED BALANCE SHEETS			4

CONSOLIDATED STATEMENTS OF OPERATIONS			5

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME			6

CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) AND REDEEMABLE NONCONTROLLING INTERESTS			7

CONSOLIDATED STATEMENTS OF CASH FLOWS			9

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS			10

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			3638

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			5352

ITEM 4. CONTROLS AND PROCEDURES			5452

PART II. OTHER INFORMATION			5653

ITEM 1. LEGAL PROCEEDINGS			5653

ITEM 1A. RISK FACTORS			5653

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			5653

ITEM 3. DEFAULTS UPON SENIOR SECURITIES			5654

ITEM 4. MINE SAFETY DISCLOSURES			5654

ITEM 5. OTHER INFORMATION			5654

ITEM 6. EXHIBITS			5754

SIGNATURE			5855

Table of Contents

~~PART I. FINANCIAL INFORMATION~~

ITEM 1. FINANCIAL STATEMENTS

Table of Contents

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data) (Unaudited)


		As of March 31, 2021		As of December 31, 2020			As of March 31, 2022		As of December 31, 2021
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	941	$	1,259	Cash and cash equivalents	$	521	$	816

Accounts receivable, net of allowance for doubtful accounts of $4 and $5, respectively		1,058		1,060
Accounts receivable, net of allowance for doubtful accounts of $7 as of both periods						Accounts receivable, net of allowance for doubtful accounts of $7 as of both periods	620		1,245

Income taxes receivable	Income taxes receivable	235		230		Income taxes receivable	156		152
Prepaid sports rights	Prepaid sports rights	542		498		Prepaid sports rights	—		85
Prepaid expenses and other current assets	Prepaid expenses and other current assets	194		170		Prepaid expenses and other current assets	170		173
Total current assets	Total current assets	2,970		3,217		Total current assets	1,467		2,471

Property and equipment, net	Property and equipment, net	804		823		Property and equipment, net	715		833
Operating lease assets	Operating lease assets	189		197		Operating lease assets	152		207
Deferred tax assets	Deferred tax assets	202		197		Deferred tax assets	—		293
Restricted cash	Restricted cash	4		3		Restricted cash	—		3
Goodwill	Goodwill	2,091		2,092		Goodwill	2,088		2,088
Indefinite-lived intangible assets	Indefinite-lived intangible assets	150		171		Indefinite-lived intangible assets	150		150
Customer relationships, net	Customer relationships, net	4,189		4,286		Customer relationships, net	504		3,904
Other definite-lived intangible assets, net	Other definite-lived intangible assets, net	1,311		1,338		Other definite-lived intangible assets, net	571		1,184

Other assets	Other assets	1,222		1,058		Other assets	1,015		1,408
Total assets (a)	Total assets (a)	$	13,132	$	13,382	Total assets (a)	$	6,662	$	12,541

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS, AND EQUITY	LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS, AND EQUITY					LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS, AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	$	469	$	533	Accounts payable and accrued liabilities	$	392	$	655

Current portion of notes payable, finance leases, and commercial bank financing	Current portion of notes payable, finance leases, and commercial bank financing	58		58		Current portion of notes payable, finance leases, and commercial bank financing	36		69
Current portion of operating lease liabilities	Current portion of operating lease liabilities	30		34		Current portion of operating lease liabilities	22		35
Current portion of program contracts payable	Current portion of program contracts payable	77		92		Current portion of program contracts payable	74		97
Other current liabilities	Other current liabilities	288		317		Other current liabilities	79		346
Total current liabilities	Total current liabilities	922		1,034		Total current liabilities	603		1,202

Notes payable, finance leases, and commercial bank financing, less current portion	Notes payable, finance leases, and commercial bank financing, less current portion	12,482		12,493		Notes payable, finance leases, and commercial bank financing, less current portion	4,362		12,271
Operating lease liabilities, less current portion	Operating lease liabilities, less current portion	194		198		Operating lease liabilities, less current portion	163		205
Program contracts payable, less current portion	Program contracts payable, less current portion	26		30		Program contracts payable, less current portion	17		21

Deferred tax liabilities						Deferred tax liabilities	395		—
Other long-term liabilities	Other long-term liabilities	506		622		Other long-term liabilities	235		351
Total liabilities (a)	Total liabilities (a)	14,130		14,377		Total liabilities (a)	5,775		14,050
Commitments and contingencies (See Note 6)	Commitments and contingencies (See Note 6)	0		0		Commitments and contingencies (See Note 6)	0		0
Redeemable noncontrolling interests	Redeemable noncontrolling interests	188		190		Redeemable noncontrolling interests	184		197
Shareholders' equity:	Shareholders' equity:					Shareholders' equity:
Class A Common Stock, $.01 par value, 500,000,000 shares authorized, 51,118,350 and 49,252,671 shares issued and outstanding, respectively		1		1
Class B Common Stock, $.01 par value, 140,000,000 shares authorized, 24,217,682 and 24,727,682 shares issued and outstanding, respectively, convertible into Class A Common Stock		0		0
Class A Common Stock, $.01 par value, 500,000,000 shares authorized, 47,934,815 and 49,314,303 shares issued and outstanding, respectively						Class A Common Stock, $.01 par value, 500,000,000 shares authorized, 47,934,815 and 49,314,303 shares issued and outstanding, respectively	1		1
Class B Common Stock, $.01 par value, 140,000,000 shares authorized, 23,775,056 and 23,775,056 shares issued and outstanding, respectively, convertible into Class A Common Stock						Class B Common Stock, $.01 par value, 140,000,000 shares authorized, 23,775,056 and 23,775,056 shares issued and outstanding, respectively, convertible into Class A Common Stock	—		—
Additional paid-in capital	Additional paid-in capital	735		721		Additional paid-in capital	657		691
Accumulated deficit		(2,013)		(1,986)
Retained earnings (accumulated deficit)						Retained earnings (accumulated deficit)	109		(2,460)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(2)		(10)		Accumulated other comprehensive loss	(2)		(2)
Total Sinclair Broadcast Group shareholders’ deficit		(1,279)		(1,274)
Total Sinclair Broadcast Group shareholders’ equity (deficit)						Total Sinclair Broadcast Group shareholders’ equity (deficit)	765		(1,770)
Noncontrolling interests	Noncontrolling interests	93		89		Noncontrolling interests	(62)		64
Total deficit		(1,186)		(1,185)
Total liabilities, redeemable noncontrolling interests, and deficit		$	13,132	$	13,382
Total equity (deficit)						Total equity (deficit)	703		(1,706)
Total liabilities, redeemable noncontrolling interests, and equity						Total liabilities, redeemable noncontrolling interests, and equity	$	6,662	$	12,541

The accompanying notes are an integral part of these unaudited consolidated financial statements.

(a) Our consolidated total assets as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 include total assets of variable interest entities (VIEs) of ~~$241~~$118 million and ~~$233~~$217 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 include total liabilities of VIEs of ~~$57~~$17 million and ~~$60~~$62 million, respectively, for which the creditors of the VIEs have no recourse to us. See Note 9. Variable Interest Entities.

Table of Contents

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except share and per share data) (Unaudited)


		Three Months Ended March 31,				Three Months Ended March 31,
		2021		2020				2022		2021
REVENUES:	REVENUES:						REVENUES:
Media revenues	Media revenues	$	1,497	$	1,574		Media revenues	$	1,275	$	1,497
Non-media revenues	Non-media revenues	14		35			Non-media revenues	13		14
Total revenues	Total revenues	1,511		1,609			Total revenues	1,288		1,511

OPERATING EXPENSES:	OPERATING EXPENSES:						OPERATING EXPENSES:
Media programming and production expenses	Media programming and production expenses	1,023		828			Media programming and production expenses	758		1,023
Media selling, general and administrative expenses	Media selling, general and administrative expenses	213		210			Media selling, general and administrative expenses	220		213
Amortization of program contract costs	Amortization of program contract costs	23		23			Amortization of program contract costs	25		23
Non-media expenses	Non-media expenses	17		30			Non-media expenses	13		17
Depreciation of property and equipment	Depreciation of property and equipment	28		24			Depreciation of property and equipment	28		28
Corporate general and administrative expenses	Corporate general and administrative expenses	61		49			Corporate general and administrative expenses	47		61
Amortization of definite-lived intangible and other assets	Amortization of definite-lived intangible and other assets	125		150			Amortization of definite-lived intangible and other assets	93		125

Gain on deconsolidation of subsidiary							Gain on deconsolidation of subsidiary	(3,357)		—
Gain on asset dispositions and other, net of impairment	Gain on asset dispositions and other, net of impairment	(14)		(32)			Gain on asset dispositions and other, net of impairment	(5)		(14)

Total operating expenses		1,476		1,282
Total operating (gains) expenses							Total operating (gains) expenses	(2,178)		1,476
Operating income	Operating income	35		327			Operating income	3,466		35

OTHER INCOME (EXPENSE):	OTHER INCOME (EXPENSE):						OTHER INCOME (EXPENSE):
Interest expense including amortization of debt discount and deferred financing costs	Interest expense including amortization of debt discount and deferred financing costs	(151)		(180)			Interest expense including amortization of debt discount and deferred financing costs	(115)		(151)
Gain on extinguishment of debt		0		2
Income (loss) from equity method investments		9		(6)
Other income (expense), net		124		(4)

Income from equity method investments							Income from equity method investments	12		9
Other (expense) income, net							Other (expense) income, net	(60)		124
Total other expense, net	Total other expense, net	(18)		(188)			Total other expense, net	(163)		(18)
Income before income taxes	Income before income taxes	17		139			Income before income taxes	3,303		17
INCOME TAX BENEFIT		9		12
INCOME TAX (PROVISION) BENEFIT							INCOME TAX (PROVISION) BENEFIT	(687)		9
NET INCOME	NET INCOME	26		151			NET INCOME	2,616		26
Net income attributable to the redeemable noncontrolling interests	Net income attributable to the redeemable noncontrolling interests	(4)		(20)			Net income attributable to the redeemable noncontrolling interests	(4)		(4)
Net income attributable to the noncontrolling interests	Net income attributable to the noncontrolling interests	(34)		(8)			Net income attributable to the noncontrolling interests	(25)		(34)
NET (LOSS) INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP		$	(12)	$	123
NET INCOME (LOSS) ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP							NET INCOME (LOSS) ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	$	2,587	$	(12)

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP:	EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP:						EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP:
Basic (loss) earnings per share		$	(0.16)	$	1.36
Diluted (loss) earnings per share		$	(0.16)	$	1.35
Basic earnings (loss) per share							Basic earnings (loss) per share	$	35.85	$	(0.16)
Diluted earnings (loss) per share							Diluted earnings (loss) per share	$	35.84	$	(0.16)
Basic weighted average common shares outstanding (in thousands)	Basic weighted average common shares outstanding (in thousands)	74,389		90,609			Basic weighted average common shares outstanding (in thousands)	72,164		74,389
Diluted weighted average common and common equivalent shares outstanding (in thousands)	Diluted weighted average common and common equivalent shares outstanding (in thousands)	74,389		91,226			Diluted weighted average common and common equivalent shares outstanding (in thousands)	72,176		74,389

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions) (Unaudited)


		Three Months Ended March 31,				Three Months Ended March 31,
		2021		2020				2022		2021
Net income	Net income	$	26	$	151		Net income	$	2,616	$	26
Share of other comprehensive income of equity method investments	Share of other comprehensive income of equity method investments	8		0			Share of other comprehensive income of equity method investments	3		8

Comprehensive income	Comprehensive income	34		151			Comprehensive income	2,619		34
Comprehensive income attributable to the redeemable noncontrolling interests	Comprehensive income attributable to the redeemable noncontrolling interests	(4)		(20)			Comprehensive income attributable to the redeemable noncontrolling interests	(4)		(4)
Comprehensive income attributable to the noncontrolling interests	Comprehensive income attributable to the noncontrolling interests	(34)		(8)			Comprehensive income attributable to the noncontrolling interests	(25)		(34)
Comprehensive (loss) income attributable to Sinclair Broadcast Group		$	(4)	$	123
Comprehensive income (loss) attributable to Sinclair Broadcast Group							Comprehensive income (loss) attributable to Sinclair Broadcast Group	$	2,590	$	(4)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) AND REDEEMABLE NONCONTROLLING INTERESTS

(in millions, except share and per share data) (Unaudited)

Three Months Ended March 31, 2020
Sinclair Broadcast Group Shareholders
Redeemable Noncontrolling Interests Class A
Common Stock Class B
Common Stock Additional
Paid-In
Capital Retained Earnings Accumulated
Other
Comprehensive
Loss Noncontrolling
Interests Total Equity
Shares Values Shares Values
BALANCE, December 31, 2019 $ 1,078 66,830,110 $ 1 24,727,682 $ 0 $ 1,011 $ 492 $ (2) $ 192 $ 1,694
Dividends declared and paid on Class A and Class B Common Stock ($0.20 per share) — — — — — — (19) — — (19)
Repurchases of Class A Common Stock — (9,957,297) — — — (176) — — — (176)
Class A Common Stock issued pursuant to employee benefit plans — 1,479,684 — — — 29 — — — 29
Distributions to noncontrolling interests, net — — — — — — — — (3) (3)
Distributions to redeemable noncontrolling interests (378) — — — — — — — — —
Redemption of redeemable subsidiary preferred equity, net of fees (198) — — — — — — — — —
Net income 20 — — — — — 123 — 8 131
BALANCE, March 31, 2020 $ 522 58,352,497 $ 1 24,727,682 $ 0 $ 864 $ 596 $ (2) $ 197 $ 1,656


	Three Months Ended March 31, 2021
			Sinclair Broadcast Group Shareholders
	Redeemable Noncontrolling Interests		Class A Common Stock			Class B Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total Deficit
			Shares	Values		Shares	Values
BALANCE, December 31, 2020	$	190	49,252,671	$	1	24,727,682	$	—	$	721	$	(1,986)	$	(10)	$	89	$	(1,185)
Dividends declared and paid on Class A and Class B Common Stock ($0.20 per share)	—		—	—		—	—		—		(15)		—		—		(15)

Class B Common Stock converted into Class A Common Stock	—		510,000	—		(510,000)	—		—		—		—		—		—
Class A Common Stock issued pursuant to employee benefit plans	—		1,355,679	—		—	—		14		—		—		—		14


Distributions to noncontrolling interests, net	(6)		—	—		—	—		—		—		—		(30)		(30)


Other comprehensive income	—		—	—		—	—		—		—		8		—		8
Net income (loss)	4		—	—		—	—		—		(12)		—		34		22
BALANCE, March 31, 2021	$	188	51,118,350	$	1	24,217,682	$	—	$	735	$	(2,013)	$	(2)	$	93	$	(1,186)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) AND REDEEMABLE NONCONTROLLING INTERESTS

(in millions, except share and per share data) (Unaudited)


	Three Months Ended March 31, 2022
			Sinclair Broadcast Group Shareholders
	Redeemable Noncontrolling Interests		Class A Common Stock			Class B Common Stock			Additional Paid-In Capital		(Accumulated Deficit) Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total (Deficit) Equity
			Shares	Values		Shares	Values
BALANCE, December 31, 2021	$	197	49,314,303	$	1	23,775,056	$	—	$	691	$	(2,460)	$	(2)	$	64	$	(1,706)
Dividends declared and paid on Class A and Class B Common Stock ($0.25 per share)	—		—	—		—	—		—		(18)		—		—		(18)

Repurchases of Class A Common Stock	—		(2,472,485)	—		—	—		(68)		—		—		—		(68)
Class A Common Stock issued pursuant to employee benefit plans	—		1,092,997	—		—	—		34		—		—		—		34

Distributions to noncontrolling interests	(1)		—	—		—	—		—		—		—		(3)		(3)
Other comprehensive income	—		—	—		—	—		—		—		3		—		3
Deconsolidation of subsidiary	(16)		—	—		—	—		—		—		(3)		(148)		(151)
Net income	4		—	—		—	—		—		2,587		—		25		2,612
BALANCE, March 31, 2022	$	184	47,934,815	$	1	23,775,056	$	—	$	657	$	109	$	(2)	$	(62)	$	703

Three Months Ended March 31, 2021
Sinclair Broadcast Group Shareholders
Redeemable Noncontrolling Interests Class A
Common Stock Class B
Common Stock Additional
Paid-In
Capital Accumulated Deficit Accumulated
Other
Comprehensive
Loss Noncontrolling
Interests Total Deficit
Shares Values Shares Values
BALANCE, December 31, 2020 $ 190 49,252,671 $ 1 24,727,682 $ 0 $ 721 $ (1,986) $ (10) $ 89 $ (1,185)
Dividends declared and paid on Class A and Class B Common Stock ($0.20 per share) — — — — — — (15) — — (15)
Class B Common Stock converted into Class A Common Stock — 510,000 — (510,000) — — — — — 0
Class A Common Stock issued pursuant to employee benefit plans — 1,355,679 — — — 14 — — — 14
Distributions to noncontrolling interests (6) — — — — — — — (30) (30)
Other comprehensive income — — — — — — — 8 — 8
Net income (loss) 4 — — — — — (12) — 34 22
BALANCE, March 31, 2021 $ 188 51,118,350 $ 1 24,217,682 $ 0 $ 735 $ (2,013) $ (2) $ 93 $ (1,186)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions) (Unaudited)


		Three Months Ended March 31,					Three Months Ended March 31,
		2021		2020			2022		2021
CASH FLOWS USED IN OPERATING ACTIVITIES:
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:						CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income	Net income	$	26	$	151	Net income	$	2,616	$	26
Adjustments to reconcile net income to net cash flows used in operating activities:
Adjustments to reconcile net income to net cash flows from (used in) operating activities:						Adjustments to reconcile net income to net cash flows from (used in) operating activities:

Amortization of sports programming rights	Amortization of sports programming rights	552		391		Amortization of sports programming rights	326		552
Amortization of definite-lived intangible and other assets	Amortization of definite-lived intangible and other assets	125		150		Amortization of definite-lived intangible and other assets	93		125
Depreciation of property and equipment	Depreciation of property and equipment	28		24		Depreciation of property and equipment	28		28
Amortization of program contract costs	Amortization of program contract costs	23		23		Amortization of program contract costs	25		23
Stock-based compensation	Stock-based compensation	33		17		Stock-based compensation	29		33
Deferred tax benefit		(3)		22
Deferred tax provision (benefit)						Deferred tax provision (benefit)	689		(3)
Gain on asset dispositions and other, net of impairment	Gain on asset dispositions and other, net of impairment	(14)		(32)		Gain on asset dispositions and other, net of impairment	(5)		(14)
(Income) loss from equity method investments		(9)		6
(Gain) loss from investments		(123)		2
Gain on deconsolidation of subsidiary						Gain on deconsolidation of subsidiary	(3,357)		—
Income from equity method investments						Income from equity method investments	(12)		(9)
Loss (income) from investments						Loss (income) from investments	54		(123)
Distributions from investments	Distributions from investments	14		24		Distributions from investments	25		14
Sports programming rights payments	Sports programming rights payments	(607)		(612)		Sports programming rights payments	(325)		(607)
Rebate payments to distributors	Rebate payments to distributors	(133)		0		Rebate payments to distributors	(15)		(133)
Gain on extinguishment of debt		0		(2)

Change in assets and liabilities, net of acquisitions:
Measurement adjustment loss on variable payment obligations						Measurement adjustment loss on variable payment obligations	3		1
Change in assets and liabilities, net of acquisitions and deconsolidation of subsidiary:						Change in assets and liabilities, net of acquisitions and deconsolidation of subsidiary:
Decrease in accounts receivable	Decrease in accounts receivable	6		34		Decrease in accounts receivable	16		6
(Increase) decrease in prepaid expenses and other current assets		(37)		44
Decrease in accounts payable and accrued and other current liabilities		(72)		(240)
Increase in prepaid expenses and other current assets						Increase in prepaid expenses and other current assets	(99)		(37)
Increase (decrease) in accounts payable and accrued and other current liabilities						Increase (decrease) in accounts payable and accrued and other current liabilities	5		(72)
Net change in net income taxes payable/receivable	Net change in net income taxes payable/receivable	(4)		(34)		Net change in net income taxes payable/receivable	(3)		(4)
Decrease in program contracts payable	Decrease in program contracts payable	(25)		(23)		Decrease in program contracts payable	(26)		(25)

Increase in other long-term liabilities						Increase in other long-term liabilities	(7)		—
Other, net	Other, net	14		16		Other, net	10		13
Net cash flows used in operating activities		(206)		(39)
Net cash flows from (used in) operating activities						Net cash flows from (used in) operating activities	70		(206)
CASH FLOWS USED IN INVESTING ACTIVITIES:	CASH FLOWS USED IN INVESTING ACTIVITIES:					CASH FLOWS USED IN INVESTING ACTIVITIES:
Acquisition of property and equipment	Acquisition of property and equipment	(20)		(46)		Acquisition of property and equipment	(21)		(20)
Acquisition of businesses, net of cash acquired		(2)		0

Spectrum repack reimbursements	Spectrum repack reimbursements	14		24		Spectrum repack reimbursements	1		14
Proceeds from sale of assets	Proceeds from sale of assets	28		18		Proceeds from sale of assets	4		28
Deconsolidation of subsidiary cash						Deconsolidation of subsidiary cash	(315)		—
Purchases of investments	Purchases of investments	(49)		(25)		Purchases of investments	(5)		(49)

Distributions from investments						Distributions from investments	70		3
Other, net	Other, net	3		6		Other, net	—		(2)
Net cash flows used in investing activities	Net cash flows used in investing activities	(26)		(23)		Net cash flows used in investing activities	(266)		(26)
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:
CASH FLOWS USED IN FINANCING ACTIVITIES:						CASH FLOWS USED IN FINANCING ACTIVITIES:
Proceeds from notes payable and commercial bank financing	Proceeds from notes payable and commercial bank financing	6		873		Proceeds from notes payable and commercial bank financing	—		6
Repayments of notes payable, commercial bank financing and finance leases	Repayments of notes payable, commercial bank financing and finance leases	(26)		(20)		Repayments of notes payable, commercial bank financing and finance leases	(7)		(26)
Repurchase of outstanding Class A Common Stock	Repurchase of outstanding Class A Common Stock	0		(176)		Repurchase of outstanding Class A Common Stock	(68)		—
Dividends paid on Class A and Class B Common Stock	Dividends paid on Class A and Class B Common Stock	(15)		(18)		Dividends paid on Class A and Class B Common Stock	(18)		(15)
Dividends paid on redeemable subsidiary preferred equity	Dividends paid on redeemable subsidiary preferred equity	(4)		0		Dividends paid on redeemable subsidiary preferred equity	(1)		(4)
Redemption of redeemable subsidiary preferred equity		0		(198)

Distributions to noncontrolling interests, net	Distributions to noncontrolling interests, net	(30)		(3)		Distributions to noncontrolling interests, net	(3)		(30)
Distributions to redeemable noncontrolling interests	Distributions to redeemable noncontrolling interests	(2)		(378)		Distributions to redeemable noncontrolling interests	—		(2)
Other, net	Other, net	(14)		(9)		Other, net	(5)		(14)
Net cash flows (used in) from financing activities		(85)		71
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		(317)		9
Net cash flows used in financing activities						Net cash flows used in financing activities	(102)		(85)
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH						NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(298)		(317)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	1,262		1,333		CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	819		1,262
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	945	$	1,342	CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	521	$	945

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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SINCLAIR BROADCAST GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Nature of Operations

Sinclair Broadcast Group, Inc. ~~(the Company)~~("SBG" or the "Company") is a diversified television media company with national reach and a strong focus on providing high-quality content on our local television stations, digital platforms, and, prior to Deconsolidation, as defined below in Deconsolidation of Diamond Sports Intermediate Holdings LLC, regional sports ~~networks, and digital platforms.~~networks. The content, distributed through our broadcast platform and third-party platforms, consists of programming provided by third-party networks and syndicators, local news, college and professional sports, and other original programming produced by us. Additionally, we own digital media products that are complementary to our extensive portfolio of television station related digital properties. Outside of our media related businesses, we operate technical services companies focused on supply and maintenance of broadcast transmission systems as well as research and development for the advancement of broadcast technology, and we manage other non-media related investments.

~~As of~~For the quarter ended March 31, ~~2021,~~2022, we had 2 reportable segments for accounting purposes, broadcast and, prior to Deconsolidation, as defined below in Deconsolidation of Diamond Sports Intermediate Holdings LLC, local sports. The broadcast segment consists primarily of our ~~186~~185 broadcast television stations in 8786 markets, which we own, provide programming and operating services pursuant to agreements commonly referred to as local marketing agreements ~~(LMAs)~~("LMA"), or provide sales services and other non-programming operating services pursuant to other outsourcing agreements (such as joint sales agreements ~~(JSAs)~~("JSA") and shared services agreements ~~(SSAs)~~("SSA")). These stations broadcast ~~628~~634 channels as of March 31, ~~2021.~~2022. For the purpose of this report, these ~~186~~185 stations and ~~628~~634 channels are referred to as "our" stations and channels. The local sports segment ~~consists~~consisted primarily of our Bally Sports network brands ~~(the~~ ("Bally ~~RSNs)~~RSNs"), the Marquee Sports Network ~~(Marquee)~~("Marquee") joint venture and a minority equity interest in the Yankee Entertainment and Sports Network, LLC ~~(YES Network). We~~("YES Network") through February 28, 2022. On March 1, 2022, the Bally RSNs, Marquee and YES Network were deconsolidated from the Company's financial statements. See Deconsolidation of Diamond Sports Intermediate Holdings LLC below. Through February 28, 2022, we refer to the Bally RSNs and Marquee as "the RSNs". The RSNs and YES Network own the exclusive rights to air, among other sporting events, the games of professional sports teams in designated local viewing areas.

Principles of Consolidation

The consolidated financial statements include our accounts and those of our wholly-owned and majority-owned subsidiaries, and VIEs for which we are the primary beneficiary. Noncontrolling interests represent a minority owner’s proportionate share of the equity in certain of our consolidated entities. Noncontrolling interests which may be redeemed by the holder, and the redemption is outside of our control, are presented as redeemable noncontrolling interests. All intercompany transactions and account balances have been eliminated in consolidation.

We consolidate VIEs when we are the primary beneficiary. We are the primary beneficiary of a VIE when we have the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and have the obligation to absorb losses or the right to receive returns that would be significant to the VIE. See Note 9. Variable Interest Entities for more information on our VIEs.

Investments in entities over which we have significant influence but not control are accounted for using the equity method of accounting. Income from equity method investments represents our proportionate share of net income generated by equity method investees.

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Deconsolidation of Diamond Sports Intermediate Holdings LLC

On March 1, 2022, SBG's subsidiary Diamond Sports Intermediate Holdings, LLC, and certain subsidiaries (collectively "DSIH") completed a series of transactions (the “Transaction”) which are expected to provide DSIH with approximately $1 billion of liquidity enhancement over the next five years. As part of the Transaction, the governance structure of DSIH was modified including changes to the composition of its Board of Managers, resulting in the Company's loss of voting control. As a result, DSIH, whose operations represented the entirety of our local sports segment, was deconsolidated from the Company’s consolidated financial statements effective as of March 1, 2022 (the "Deconsolidation"). The consolidated statement of operations therefore includes two months of activity related to DSIH in the fiscal quarter ended March 31, 2022 prior to Deconsolidation. The assets and liabilities of DSIH are no longer included within the Company's consolidated balance sheets as of March 31, 2022. Any discussions related to results, operations, and accounting policies associated with DSIH are referring to the periods prior to Deconsolidation.

Upon Deconsolidation, the Company recognized a gain before income taxes of approximately $3,357 million, which is recorded within gain on deconsolidation of subsidiary in our consolidated statements of operations. Subsequent to Deconsolidation, the Company accounted for our equity ownership interest in DSIH under the equity method of accounting. See Note 3. Other Assets for more information.

Interim Financial Statements

The consolidated financial statements for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 are unaudited. In the opinion of management, such financial statements have been presented on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated statements of equity (deficit) and redeemable noncontrolling interests, and consolidated statements of cash flows for these periods as adjusted for the adoption of recent accounting ~~pronouncements discussed below.~~pronouncements.

As permitted under the applicable rules and regulations of the Securities and Exchange Commission ~~(SEC)~~(the "SEC"), the consolidated financial statements do not include all disclosures normally included with audited consolidated financial statements and, accordingly, should be read together with the audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 filed with the SEC. The consolidated statements of operations presented in the accompanying consolidated financial statements are not necessarily representative of operations for an entire year.

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Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses in the consolidated financial statements and in the disclosures of contingent assets and liabilities. Actual results could differ from those estimates.

The impact of the war in Ukraine and the outbreak of the novel coronavirus ~~(COVID-19)~~("COVID-19") continues to create significant uncertainty and disruption in the global economy and financial markets. It is reasonably possible that these uncertainties could further materially impact our estimates related to, but not limited to, revenue recognition, goodwill and intangible assets, program contract costs, sports programming rights, and income taxes. As a result, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. Our estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in our consolidated financial statements.

Recent Accounting Pronouncements

In March 2020, the FASB issued guidance providing optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate ~~(LIBOR)~~("LIBOR") or by another reference rate expected to be discontinued. The guidance was effective for all entities immediately upon issuance of the update and may be applied prospectively to applicable transactions existing as of or entered into from the date of adoption through December 31, 2022. We adopted this guidance upon issuance and it did not have an impact on our consolidated financial statements.

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In October 2021, the FASB issued guidance to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice. ASU 2021-08 requires that an acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, as if it had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact of this guidance, ~~if elected,~~ but do not expect a material impact on our consolidated financial statements.

Broadcast Television Programming

We have agreements with ~~multi-channel video~~ programming ~~distributors (MVPDs) and virtual MVPDs (vMVPDs, and together with MVPDs, "Distributors")~~syndicators for the rights to television programming over contract periods, which generally run from one to seven years. Contract payments are made in installments over terms that are generally equal to or shorter than the contract period. Pursuant to accounting guidance for the broadcasting industry, an asset and a liability for the rights acquired and obligations incurred under a license agreement are reported on the balance sheet when the cost of each program is known or reasonably determinable, the program material has been accepted by the licensee in accordance with the conditions of the license agreement, and the program is available for its first showing or telecast. The portion of program contracts which becomes payable within one year is reflected as a current liability in the accompanying consolidated balance sheets

The rights to this programming are reflected in the accompanying consolidated balance sheets at the lower of unamortized cost or fair value. Program contract costs are amortized on a straight-line basis except for contracts greater than three years which are amortized utilizing an accelerated method. Program contract costs estimated by management to be amortized in the succeeding year are classified as current assets. Payments of program contract liabilities are typically made on a scheduled basis and are not affected by amortization or fair value adjustments.

Fair value is determined utilizing a discounted cash flow model based on management’s expectation of future advertising revenues, net of sales commissions, to be generated by the program material. We assess our program contract costs on a quarterly basis to ensure the costs are recorded at the lower of unamortized cost or fair value.

Sports Programming Rights

~~We have~~DSIH has multi-year program rights agreements that provide ~~the Company~~DSIH with the right to produce and telecast professional live sports games within a specified territory in exchange for a rights fee. APrior to the Deconsolidation, a prepaid asset iswas recorded for rights acquired related to future games upon payment of the contracted fee. The assets recorded for the acquired rights ~~are~~were classified as current or non-current based on the period when the games ~~are~~were expected to be aired. Liabilities ~~are~~were recorded for any program rights obligations that ~~have~~had been incurred but not yet paid at period end. We ~~amortize~~amortized these ~~programming~~ rights as an expense over each season based upon contractually stated rates. Amortization iswas accelerated in the event that the stated contractual rates over the term of the rights agreement ~~results~~resulted in an expense recognition pattern that iswas inconsistent with the projected growth of revenue over the contractual term.

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~~During the three months ended March 31, 2020, the~~The National Basketball Association ~~(NBA),~~(“NBA”) and the National Hockey League (NHL), and Major League Baseball (MLB) suspended or delayed the start of their seasons as a result of the COVID-19 pandemic. On that date, the Company suspended the recognition of amortization expense associated with prepaid program rights agreements with teams within these leagues. Amortization expense resumed for the NBA, NHL, and MLB over the modified seasons when the games commenced during the third quarter of 2020. The NBA and NHL also (“NHL”) delayed the start of their 2020-2021 seasons until December 22, 2020 and January 13, 2021, ~~respectively;~~respectively, and both leagues postponed games in the fourth quarter 2021 and rescheduled these games to be played in the first quarter 2022. The sports rights expense associated with these seasons ~~will be~~was recognized over the modified term of these seasons.

~~Certain rights agreements with professional teams contain provisions which require the rebate of rights fees paid by the Company if a contractual minimum number of live games are not delivered. As of~~ ~~March 31, 2021, we have estimated rebates due from teams of $42 million which we expect to receive in the second quarter of 2021.~~ The actual amount of rebates to be received will vary depending on changes in the final game counts of each leagues' respective season. Rights fees paid in advance of expense recognition, inclusive of any contractual rebates due to the Company, are included within prepaid sports rights in our consolidated balance sheets.

Non-cash Investing and Financing Activities

~~Non-cash transactions related to finance lease obligations were $6 million during the three months ended March 31, 2020.~~ Leased assets obtained in exchange for new operating lease liabilities were $5 million and $3 million ~~and $8 million during~~for the three months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively. Leased assets obtained in exchange for new finance lease liabilities were $1 million for the three months ended March 31, 2022.

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Revenue Recognition

The following table presents our revenue disaggregated by type and segment (in millions):


For the three months ended March 31, 2021	Broadcast		Local sports		Other		Eliminations		Total
Distribution revenue	$	361	$	698	$	50	$	0	$	1,109
Advertising revenue	267		65		40		(1)		371
Other media, non-media, and intercompany revenues	37		5		18		(29)		31
Total revenues	$	665	$	768	$	108	$	(30)	$	1,511

For the three months ended March 31, 2020	Broadcast		Local sports		Other		Eliminations		Total
Distribution revenue	$	355	$	752	$	49	$	0	$	1,156
Advertising revenue	310		55		35		0		400
Other media, non-media, and intercompany revenues	36		5		44		(32)		53
Total revenues	$	701	$	812	$	128	$	(32)	$	1,609

For the three months ended March 31, 2022											For the three months ended March 31, 2022	Broadcast		Local sports		Other		Eliminations		Total
Distribution revenue											Distribution revenue	$	392	$	433	$	48	$	—	$	873
Advertising revenue											Advertising revenue	282		44		68		(23)		371
Other media, non-media, and intercompany revenues											Other media, non-media, and intercompany revenues	47		5		18		(26)		44
Total revenues											Total revenues	$	721	$	482	$	134	$	(49)	$	1,288

For the three months ended March 31, 2021											For the three months ended March 31, 2021	Broadcast		Local sports		Other		Eliminations		Total
Distribution revenue											Distribution revenue	$	361	$	698	$	50	$	—	$	1,109
Advertising revenue											Advertising revenue	267		65		40		(1)		371
Other media, non-media, and intercompany revenues											Other media, non-media, and intercompany revenues	37		5		18		(29)		31
Total revenues											Total revenues	$	665	$	768	$	108	$	(30)	$	1,511

Distribution Revenue. We have agreements with multi-channel video programming distributors ("MVPD") and virtual MVPDs ("vMVPD," and together with MVPDs, "Distributors"). We generate distribution revenue through fees received from these Distributors for the right to distribute our stations, RSNs, and other properties. Distribution arrangements are generally governed by multi-year contracts and the underlying fees are based upon a contractual monthly rate per subscriber. These arrangements represent licenses of intellectual property; revenue is recognized as the signal or network programming is provided to our customers (as usage occurs) which corresponds with the satisfaction of our performance obligation. Revenue is calculated based upon the contractual rate multiplied by an estimated number of subscribers. Our customers will remit payments based upon actual subscribers a short time after the conclusion of a month, which generally does not exceed 120 days. Historical adjustments to subscriber estimates have not been material.

Certain of our distribution arrangements contain provisions that require the Company to deliver a minimum number of live professional sports games or tournaments during a defined period which usually corresponds with a calendar year. If the minimum threshold is not met, we may be obligated to refund a portion of the distribution fees received if shortfalls are not cured within a specified period of time. Our ability to meet these requirements is primarily driven by the delivery of games by the professional sports leagues. Prior to the COVID-19 pandemic, the Company had not historically paid any material rebates under these contractual provisions as it is unusual for there to be an event which is significant enough to preclude the Company from meeting or exceeding these thresholds. The COVID-19 pandemic has resulted in significant disruptions to the normal operations of the professional sports leagues resulting in delays and uncertainty with respect to regularly scheduled games. Decisions made by the leagues ~~during the second quarter of 2020~~ regarding the timing and format of the revised 2020 season and decisions made by the NHL and NBA during the fourth quarter of 2020 and first quarter of 2021 regarding the timing and format of their revised 2020-2021 seasons have resulted, in some cases, in ~~our inability to meet these minimum game requirements and the need to reduce revenue~~ based upon estimated rebates due to our distribution customers. Accrued rebates as of March 31, 2021 and December 31, 2020 were $268 million and $420 million, respectively. The decrease in accrued rebates during the three-month period ending March 31, 2021 includes $133 million of payments and $19 million of adjustments related primarily to increases in estimated game counts. As of March 31, 2021, $183 million is reflected in other current liabilities and $85 million is reflected in other long-term liabilities in our consolidated balance sheets. We expect these rebates to be paid during 2021 and 2022~~. There were no rebates accrued during the three-month period ending March 31, 2021. See~~ ~~Subsequent Events~~ ~~within~~ ~~Note 1. Nature of Operations and Summary of Significant Accounting Policies~~.

Advertising Revenue. We generate advertising revenue primarily from the sale of advertising spots/impressions within our broadcast television, RSN, and digital platforms.

In accordance with ASC 606, we do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) distribution arrangements which are accounted for as a sales/usage based royalty.

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Deferred Revenue. We record deferred revenue when cash payments are received or due in advance of our performance, including amounts which are refundable. We classify deferred revenue as either current in other current liabilities or long-term in other long-term liabilities in our consolidated balance sheets based on the timing of when we expect to satisfy our performance obligations. Deferred revenue was ~~$233~~$230 million and $235 million as of ~~both~~ March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, of which ~~$179~~$159 million and ~~$184~~$164 million, respectively, was reflected in other long-term liabilities in our consolidated balance sheets. Deferred revenue recognized during the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, included in the deferred revenue balance as of December 31, 2021 and 2020, was $29 million and ~~2019, was~~ $17 million, ~~and $30 million,~~ respectively.

On November 18, 2020, the Company and Diamond Sports Group, LLC (DSG) entered into an enterprise-wide commercial agreement with Bally's Corporation (Bally's), including providing certain branding integrations in our RSNs, broadcast networks and other properties. These branding integrations include naming rights associated with the majority of our RSNs (other than Marquee). The initial term of this arrangement is 10 years and we expect to begin performing under this arrangement in 2021. The Company received non-cash consideration initially valued at $199 million which is reflected as a contract liability and will be recognized as revenue as the performance obligations under the arrangement are satisfied. NaN revenue was recognized under this arrangement during the three months ended March 31, 2021. See ~~Note 3. Other Assets~~ ~~for more information.~~

For the three months ended March 31, 2022, three customers accounted for 17%, 17%, and 14%, respectively, of our total revenues. For the three months ended March 31, 2021, 3three customers accounted for 20%, 19%, and 15%, respectively, of our total revenues. ~~For the three months ended March 31, 2020, 3 customers accounted for 20%, 17%, and 12%, respectively, of our total revenues.~~ As of March 31, ~~2021, 3~~2022, two customers accounted for ~~20%, 17%,~~13% and ~~15%~~10%, respectively, of our accounts receivable, net. For purposes of this disclosure, a single customer may include multiple entities under common control.

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Income Taxes

Our income tax provision for all periods consists of federal and state income taxes. The tax provision for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 is based on the estimated effective tax rate applicable for the full year after taking into account discrete tax items and the effects of the noncontrolling interests. We provide a valuation allowance for deferred tax assets if we determine that it is more likely than not that some or all of the deferred tax assets will not be realized. In evaluating our ability to realize net deferred tax assets, we consider all available evidence, both positive and negative, including our past operating results, tax planning strategies, current and cumulative losses, and forecasts of future taxable income. In considering these sources of taxable income, we must make certain judgments that are based on the plans and estimates used to manage our underlying businesses on a long-term basis. A valuation allowance has been provided for deferred tax assets related to ~~certain temporary basis differences,~~ interest expense carryforwards under the Internal Revenue Code ~~(IRC)~~("IRC") Section 163(j) and a substantial amount of our available state net operating loss carryforwards based on past operating results, expected timing of the reversals of existing temporary basis differences, alternative tax strategies and projected future taxable income.

Our effective income tax rate for the three months ended March 31, 2022 approximated the statutory rate. Our effective income tax rate for the three months ended March 31, 2021 was less than the statutory rate primarily due to substantially magnified impact of discrete items as a result of ~~small~~low pre-tax income. Our effective income tax rate for the three months ended March 31, 2020 was less than the statutory rate primarily due to $27 million of federal tax credits related to investments in sustainability initiatives and a $13 million discrete benefit as a result of the CARES Act allowing for the 2020 federal net operating loss to be carried back to pre-2018 years when the federal tax rate was 35%.

We do not believe that our liability for unrecognized tax benefits would be materially impacted, in the next twelve months, as a result of expected statute of limitations expirations, the application of limits under available state administrative practice exceptions, and the resolution of examination issues and settlements with federal and certain state tax authorities.

Share Repurchase Program

On August 4, 2020, the Board of Directors authorized an additional $500 million share repurchase authorization in addition to the previous repurchase authorization of $1 billion. There is no expiration date and currently, management has no plans to terminate this program. For the three months ended March 31, 2022, we repurchased approximately 2 million shares of Class A Common Stock for $68 million. As of March 31, ~~2021,~~2022, the total remaining purchase authorization was ~~$880~~$751 million. As of May 5, 2022, we repurchased an additional 1 million shares of Class A Common Stock, for $26 million since March 31, 2022. All shares were repurchased under an SEC Rule 10b5-1 plan.

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~~Subsequent Events~~

~~In May 2021, our Board of Directors declared a quarterly dividend of $0.20 per share, payable on June 15, 2021 to holders of record at the close of business on June 1, 2021.~~

~~Other than those noted in~~ ~~Note 3. Other Assets~~ ~~and~~ ~~Note 4. Notes Payable, Finance Leases, and Commercial Bank Financing, no other subsequent events were noted.~~

The Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, including how it has already impacted, and will impact, its advertisers, Distributors, and agreements with professional sports leagues. While the NBA, NHL, and MLB were able to complete modified season schedules during 2020, there can be no assurance that the MLB, NBA, or NHL will complete full or abbreviated seasons in the future. The NBA and NHL delayed the start of their 2020-2021 seasons until December 22, 2020 and January 13, 2021, respectively, however both under reduced game counts. The MLB began their season on time in April 2021 under a full game schedule. The NBA and NHL have not announced their 2021-2022 season schedules yet. Any reduction in the number of games played by the leagues may have an adverse impact on our operations and cash flows. The Company is currently unable to predict the full extent that the COVID-19 pandemic will have on its financial condition, results of operations, and cash flows in future periods due to numerous uncertainties.

Reclassifications

Certain reclassifications have been made to prior years' consolidated financial statements to conform to the current year's presentation.

2. ACQUISITIONS AND DISPOSITIONS OF ASSETS:

~~Acquisitions.~~ ~~In February 2021, we acquired ZypMedia for approximately $7 million in cash. The acquired assets and liabilities were recorded at fair value as of the closing date of the transaction.~~

~~Dispositions~~. In February 2021, we sold 2 of our television broadcast stations, WDKA-TV in Paducah, KY, and KBSI-TV in Cape Girardeau, MO, for an aggregate purchase price of $28 million. We recorded a gain of $12 million which is included within gain on asset dispositions and other, net of impairment in our consolidated statements of operations.

Broadcast Incentive Auction. In 2012, Congress authorized the Federal Communications Commission (FCC) to conduct so-called "incentive auctions" to auction and re-purpose broadcast television spectrum for mobile broadband use. Pursuant to the auction, television broadcasters submitted bids to receive compensation for relinquishing all or a portion of their rights in the television spectrum of their full-service and Class A stations. Low power stations were not eligible to participate in the auction and are not protected and therefore may be displaced or forced to go off the air as a result of the post-auction repacking process.

In March 2016, the FCC began the repacking process associated with the auction, in which the FCC reassigned some stations to new post-auction channels. We do not expect reassignment to new channels to have a material impact on our coverage. ~~We have~~As part of that process, we received notification from the FCC that 100 of our stations have been assigned to new channels. Legislation has provided the FCC with a $3 billion fund to reimburse reasonable costs incurred by stations that are reassigned to new channels in the repack. We expect that the reimbursements from the fund will cover the majority of our expenses related to the repack. We recorded gains related to reimbursements for spectrum repack costs incurred of ~~$14~~$1 million and ~~$24~~$14 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, which are included within gain on asset dispositions and other, net of impairment in our consolidated statements of operations. Capital expenditures related to the spectrum repack were ~~$4 million and $21~~$1 million for the three months ended March 31, ~~2021~~2022 and ~~2020, respectively.~~$4 million for the three months ended March 31, 2021.

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3. OTHER ASSETS:

Other assets as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 consisted of the following (in millions):


		As of March 31, 2021		As of December 31, 2020			As of March 31, 2022		As of December 31, 2021
Equity method investments	Equity method investments	$	492	$	451	Equity method investments	$	135	$	517
Other investments	Other investments	575		450		Other investments	505		567
Note receivable						Note receivable	163		—
Post-retirement plan assets	Post-retirement plan assets	48		44		Post-retirement plan assets	48		50
Other	Other	107		113		Other	164		274
Total other assets	Total other assets	$	1,222	$	1,058	Total other assets	$	1,015	$	1,408

Equity Method Investments

We have a portfolio of investments, including our investment in the YES Network (prior to the Deconsolidation), our investment in DSIH (subsequent to the Deconsolidation), and also a number of entities that are primarily focused on the development of real estate ~~sustainability initiatives,~~ and other non-media businesses. For the periods ended March 31, ~~2021~~2022 and December 31, ~~2020, none of~~2021, only our ~~investments were~~investment in DSIH was individually ~~significant.~~significant for the period ended March 31, 2022.

YES Network Investment. ~~We account~~Prior to the Deconsolidation, we accounted for our investment in the YES Network as an equity method investment, which iswas recorded within other assets in our consolidated balance sheets, and in which our proportionate share of the net income or loss generated by the investment iswas included within income ~~(loss)~~ from equity method investments in our consolidated statements of operations. ~~During~~We recorded income of $10 million and $13 million for the three months ended March 31, 2022 and 2021, respectively. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and ~~2020,~~Summary of Significant Accounting Policies.

Diamond Sports Intermediate Holdings LLC. Subsequent to the Deconsolidation, we began accounting for our equity interest in DSIH under the equity method of accounting. As of March 1, 2022, we reflected the investment in DSIH at fair value, which was determined to be nominal. For the month ended March 31, 2022, the period we account for DSIH as an equity method investment, DSIH had net revenues, gross profit, operating loss, and net loss of $228 million, $9 million, $18 million, and $70 million, respectively. For the three months ended March 31, 2022 we recorded ~~income of $13 million and $5 million, respectively,~~no equity method loss related to ~~our investment.~~the investment because the carrying value of the investment is zero and the Company is not obligated to fund losses incurred by DSIH. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

Other Investments

We measure our investments, excluding equity method investments, at fair value or, in situations where fair value is not readily determinable, we have the option to value investments at cost plus observable changes in value, less impairment. Additionally, certain investments are measured at net asset value ("NAV").

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, we held ~~$88~~$324 million and ~~$68~~$402 million, respectively, in ~~equity securities which are classified as level 1 securities in the~~investments measured at fair value ~~hierarchy. During~~and $171 million and $147 million, respectively, in investments measured at NAV. We recognized a fair value adjustment loss of $56 million and a fair value adjustment gain of $125 million for the three months ended March 31, ~~2021~~2022 and ~~2020 we recognized fair value adjustment gains of $20 million and losses of $1 million,~~2021, respectively, associated with these ~~securities,~~investments, which are reflected in other (expense) income, net in our consolidated statements of operations. As of March 31, 2022 and December 31, 2021, our unfunded commitments related to our investments valued using the NAV practical expedient totaled $78 million and $81 million, respectively.

Investments accounted for utilizing the measurement alternative were ~~$22~~$10 million, net of $7 million of cumulative impairments, as of March 31, ~~2021,~~2022, and ~~$26~~$18 million, net of $7 million of cumulative impairments, as of December 31, ~~2020.~~2021. There were 0no adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for either the three months ended March 31, ~~2021~~2022 or ~~2020.~~2021.

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Note Receivable

On November ~~18, 2020, we entered into~~5, 2021, the Company purchased and assumed the lenders’ and the administrative agent’s rights and obligations under the Accounts Receivable Securitization Facility (A/R Facility), held by Diamond Sports Finance SPV, LLC (DSPV), an indirect wholly-owned subsidiary of DSIH, by making a ~~commercial agreement with Bally's. As part~~payment to the lenders equal to approximately $184 million, representing 101% of ~~this agreement, we received warrants~~the aggregate outstanding principal amount of the loans under the A/R Facility, plus any accrued interest and outstanding fees and expenses. The maximum facility limit availability under the A/R Facility is $400 million and has a maturity date of September 23, 2024. Subsequent to ~~acquire up~~the Deconsolidation, transactions related to ~~8.2 million shares of Bally's common stock for a penny per share, of which 3.3 million~~the A/R Facility are ~~exercisable upon meeting certain performance metrics. We also received options to purchase up to 1.6 million shares of Bally's common stock with exercise prices between $30~~no longer intercompany transactions and, ~~$45 per share, exercisable after four years. These investments~~therefore, are reflected ~~at fair value within~~in our consolidated financial statements. ~~For the three months ended~~See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies. As of March 31, ~~2021 we recorded an increase in value of $103~~2022, the note receivable due to the Company is approximately $163 million which is ~~reflected in~~recorded within other ~~income, net in~~assets within our consolidated ~~statements of operations. The value of these investments was $435 million and $332 million as of March 31, 2021 and December 31, 2020, respectively. See~~ balance sheet.~~Note 11. Fair Value Measurements~~ ~~for further discussion.~~

In April 2021, we made an incremental investment of $93 million in Bally's in the form of non-voting perpetual warrants. These warrants are convertible into 1.7 million shares of Bally's common stock at an exercise price of $0.01 per share, subject to certain adjustments.

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4. NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING:

Bank Credit ~~Agreements~~Agreement

~~Each of the~~The bank credit ~~agreements~~agreement of Sinclair Television Group, Inc. ~~(STG)~~("STG"), a wholly owned subsidiary of the Company, ~~and DSG (collectively, the Bank~~(the "Bank Credit ~~Agreements) include~~Agreement") includes a financial maintenance covenant, the first lien leverage ratio (as defined in the ~~respective~~ Bank Credit ~~Agreements)~~Agreement), which requires such ~~applicable~~ ratio not to exceed 4.5x, ~~and 6.25x,~~ measured as of the end of each fiscal ~~quarter, for~~quarter. As of March 31, 2022, the STG ~~and DSG, respectively. The respective~~first lien leverage ratio was below 4.5x. Under the Bank Credit Agreement, a financial maintenance covenant is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the ~~respective~~ revolving credit facility, measured as of the last day of each fiscal quarter, is utilized under ~~such~~the revolving credit facility as of such date. Since there was 0no utilization under ~~either of~~ the revolving credit ~~facilities~~facility as of March 31, ~~2021, neither~~2022, STG ~~nor DSG~~ was subject to the respective financial maintenance covenant under their applicable Bank Credit Agreement. As of March 31, 2021, the STG first lien leverage ratio was below 4.5x and the DSG first lien leverage ratio exceeded 6.25x. We expect that the DSG first lien leverage ratio will remain above 6.25x for at least the next 12 months, which will restrict our ability to utilize the full DSG revolving credit facility. We do not currently expect to have more than 35% of the capacity of the DSG revolving credit facility outstanding as of any quarterly measurement date during the next twelve months, therefore we do not expect DSG will be subject to the financial maintenance ~~covenant.~~covenant under the Bank Credit Agreement. The Bank Credit ~~Agreements contain~~Agreement contains other restrictions and covenants with which ~~the respective entities were~~STG was in compliance as of March 31, ~~2021.~~2022.

~~On April 1, 2021, STG amended~~The debt of DSIH was deconsolidated from the ~~STG Bank Credit Agreement to raise term loans in an aggregate principal amount~~Company's balance sheet as part of ~~$740 million (STG Term Loan B-3),~~ the ~~proceeds~~Deconsolidation. See Deconsolidation of ~~which were used to refinance a portion~~Diamond Sports Intermediate Holdings LLC within Note 1. Nature of ~~STG's term loan maturing in January 2024. The STG Term Loan B-3 matures in April 2028~~Operations and ~~bears interest at LIBOR (or successor rate) plus 3.00%.~~Summary of Significant Accounting Policies.

~~Accounts receivable securitization facility~~

~~On September 23, 2020, the Company's and DSG's indirect wholly-owned subsidiary, Diamond Sports~~ Finance SPV, LLC (DSPV), entered into a $250 million accounts receivable securitization facility (the A/R Facility) which matures on September 23, 2023, in order to enable DSG to raise incremental funding for the ongoing business needs of the local sports segment.

The outstanding balance under the A/R Facility was $173 million and $177 million as of March 31, 2021 and December 31, 2020, respectively. Accounts receivable held by DSPV were $229 million and $228 million as of March 31, 2021 and December 31, 2020, respectively.

DSG's ability to make scheduled payments on its debt obligations depends on its financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, competitive, legislative, regulatory and other factors beyond its control. The impact of the outbreak of COVID-19 continues to create significant uncertainty and disruption in the global economy and financial markets. Further, DSG’s success is dependent upon the existence and terms of its agreements with distributors, OTT and other streaming providers. We anticipate DSG’s existing cash and cash equivalents, cash flow from our operations, and borrowing capacity will be sufficient to satisfy its debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months. However, certain factors, including but not limited to, the severity and duration of the COVID-19 pandemic and resulting effect on the economy, our advertisers, Distributors, and their subscribers, could affect DSG’s liquidity and ability to maintain a level of cash flows from operating activities sufficient to permit DSG to pay the principal, premium, if any, and interest on its debt.

~~Notes payable and finance~~ leases to affiliates

The current portion of notes payable, finance leases, and commercial bank financing in our consolidated balance sheets includes finance leases to affiliates of $2 million and $3 million as of March 31, ~~2021~~2022 and December 31, ~~2020.~~2021, respectively. Notes payable, finance leases, and commercial bank financing, less current portion, in our consolidated balance sheets includes finances leases to affiliates of $6 million as of both March 31, ~~2021~~2022 and December 31, ~~2020.~~2021. See Note 10. Related Person ~~Transactions~~ ~~for further discussion.~~Transactions.

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Debt of variable interest entities and guarantees of third-party ~~debt~~obligations

STG jointly, severally, unconditionally, and irrevocably guaranteed ~~$48~~$38 million and ~~$49~~$39 million of debt of certain third parties as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, of which ~~$15 million and $16~~$9 million, net of deferred financing costs, related to consolidated VIEs ~~that are~~is included in our consolidated balance sheets both as of March 31, ~~2021~~2022 and December 31, ~~2020, respectively.~~2021. These guarantees primarily relate to the debt of Cunningham Broadcasting Corporation (Cunningham) as discussed under Cunningham Broadcasting Corporation within Note 10. Related Person Transactions. The credit agreements and term loans of these VIEs each bear interest of LIBOR plus 2.50%. We have determined that, as of March 31, ~~2021,~~2022, it is not probable that we would have to perform under any of these guarantees.

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5. REDEEMABLE NONCONTROLLING INTERESTS:

We account for redeemable noncontrolling interests in accordance with ASC 480, Distinguishing Liabilities from Equity, and classify them as mezzanine equity in our consolidated balance sheets because their possible redemption is outside of the control of the Company. Our redeemable non-controlling interests consist of the following:

Redeemable Subsidiary Preferred Equity. On August 23, 2019, Diamond Sports Holdings LLC ~~(DSH)~~("DSH"), an indirect parent of DSG and indirect wholly-owned subsidiary of the Company, issued preferred equity (the ~~Redeemable~~"Redeemable Subsidiary Preferred ~~Equity)~~Equity").

Dividends accrued during the three months ended March 31, 2022 and 2021 ~~and 2020~~ were $4$3 million and ~~$13~~$4 million, respectively, and are reflected in net income attributable to the ~~redeemable~~ noncontrolling interests in our consolidated statements of operations. The dividends paid in cash accrue at a rate equal to 1-month LIBOR (with a 0.75% floor) plus 7.5%, which is 0.5% lower than the rate payable if the dividends were paid-in-kind during the quarter. Dividends accrued during the three months ended March 31, 2022 were paid-in-kind and added to the liquidation preference, which was partially offset by certain required cash tax distributions.

The balance of the Redeemable Subsidiary Preferred Equity, ~~was $170 million,~~ net of issuance costs, was $184 million and $181 million as of ~~both~~ March 31, ~~2021~~2022 and December 31, ~~2020.~~2021, respectively.

Subsidiary Equity Put Right. A noncontrolling equity holder of one of our subsidiaries has the right to sell their interest to the Company at any time during the 30-day period following September 30, 2025. The value of this redeemable noncontrolling interest was ~~$18 million and $20~~$16 million as of ~~March 31, 2021 and~~ December 31, ~~2020, respectively.~~2021. This redeemable noncontrolling interest was deconsolidated as part of the Deconsolidation. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

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6. COMMITMENTS AND CONTINGENCIES:

~~Sports Programming Rights~~

We are contractually obligated to make payments to purchase sports programming rights. The following table presents our annual non-cancellable commitments relating to our local sports segment's sports programming rights agreements as of March 31, 2021. These commitments assume that sports teams fully deliver the contractually committed games, and do not reflect the impact of rebates expected to be paid by the teams.

(in millions)
2021 (remainder) $ 1,233
2022 1,655
2023 1,608
2024 1,540
2025 1,420
2026 and thereafter 7,008
Total $ 14,464

Other Liabilities

~~In connection with our acquisition of~~Prior to the ~~Bally RSNs, we assumed~~Deconsolidation, other liabilities included certain fixed payment obligations which ~~are~~were payable through 2027. ~~We recorded these obligations in purchase accounting at estimated fair value.~~ As of ~~March~~December 31, 2021, $32 million and ~~December 31, 2020, $31~~$71 million ~~was~~were recorded within other current liabilities and ~~$98 million and $97 million, respectively, was recorded within~~ other long-term liabilities, respectively, in our consolidated balance sheets. Interest expense of $1 million and $2 million was recorded for ~~both~~ the three months ended March 31, 2022 and 2021, respectively. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and ~~2020.~~Summary of Significant Accounting Policies.

~~In connection with our acquisition of~~Prior to the ~~Bally RSNs, we assumed~~Deconsolidation, other liabilities included certain variable payment obligations which ~~are~~were payable through 2030. These contractual obligations ~~are~~were based upon the excess cash flow of certain Bally RSNs. ~~We recorded these obligations in purchase accounting at estimated fair value.~~ As of ~~March~~December 31, 2021, ~~and December 31, 2020, $14~~$8 million and ~~$12~~$23 million ~~respectively, was~~were recorded within other current liabilities and ~~$41 million was recorded within~~ other long-term liabilities, respectively, in our consolidated balance sheets. ~~These obligations are measured at the present value of the estimated amount of cash to be paid over the term of the contracts.~~ We recorded a measurement adjustment ~~loss~~losses of $3 million and $1 million for the three months ended March 31, 2022 and 2021, ~~within~~respectively, which are reflected in other (expense) income, net in our consolidated statements of operations. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

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Litigation

We are a party to lawsuits, claims, and regulatory matters from time to time in the ordinary course of business. Actions currently pending are in various stages and no material judgments or decisions have been rendered by hearing boards or courts in connection with such actions. Except as noted below, we do not believe the outcome of these matters, individually or in the aggregate, will have a material effect on the Company's financial statements.

FCC Litigation Matters

On December 21, 2017, the FCC issued a Notice of Apparent Liability for Forfeiture (NAL) proposing a $13 million fine for alleged violations of the FCC's sponsorship identification rules by the Company and certain of its subsidiaries.~~We filed a response disputing the Commission's findings and the proposed fine.~~

On May 22, 2020, the FCC released an Order and Consent Decree pursuant to which the Company agreed to pay $48 million to resolve the matters covered by a Notice of Apparent Liability for Forfeiture ("NAL") issued in December 2017 proposing a $13 million fine for alleged violations of the ~~NAL,~~FCC's sponsorship identification rules by the Company and certain of its subsidiaries, the FCC’s investigation of the allegations raised in athe Hearing Designation Order issued in connection with the Company's proposed acquisition of Tribune, and a retransmission related matter. The Company submitted the $48 million payment on August 19, 2020. As part of the consent decree, the Company also agreed to implement a 4-year compliance plan. NaN petitions were filed on June 8, 2020 seeking reconsideration of the Order and Consent Decree. The Company filed an opposition to the petitions on June 18, 2020, and the petitions remain pending.

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On September 1, 2020, one of the individuals who filed a petition for reconsideration of the Order and Consent Decree filed a petition to deny the license renewal application of WBFF(TV), Baltimore, MD, and the license renewal applications of two other Baltimore, MD stations with which the Company has a JSA or LMA, Deerfield Media station WUTB(TV) and Cunningham station WNUV(TV). The Company filed an opposition to the petition on October 1, 2020, and the petition remains pending.

On September 2, 2020, the FCC adopted a Memorandum Opinion and Order and ~~Notice of Apparent Liability for Forfeiture (NAL)~~NAL against the licensees of several stations with whom the Company has LMAs, JSAs, and/or SSAs in response to a complaint regarding those stations’ retransmission consent negotiations. The NAL proposed a $0.5 million penalty for each station, totaling $9 million. The licensees filed a response to the NAL on October 15, 2020, asking the Commission to dismiss the proceeding or, alternatively, to reduce the proposed forfeiture to $25,000 per station. On July 28, 2021, the FCC issued a forfeiture order in which the $0.5 million penalty was upheld for all but one station. A Petition for Reconsideration of the forfeiture order was filed on August 7, 2021. On March 14, 2022, the Commission released a Memorandum Opinion and Order and Order on Reconsideration, reaffirming the forfeiture order and dismissing (and in the alternative, denying) the Petition for Reconsideration. The Company is not a party to ~~that proceeding and cannot predict whether or how the proceeding will affect the Company’s~~this forfeiture order; however, our consolidated financial ~~statements. However, we accrued~~statements include an ~~expense~~accrual of additional expenses of $8 million for the above legal matters during ~~2020,~~the year ended December 31, 2021, as we consolidate these stations as VIEs.

Other Litigation Matters

On November 6, 2018, the Company agreed to enter into a proposed consent decree with the Department of Justice ~~(DOJ)~~(the "DOJ"). This consent decree resolves the DOJ’s investigation into the sharing of pacing information among certain stations in some local markets. The DOJ filed the consent decree and related documents in the U.S. District Court for the District of Columbia on November 13, 2018. The U.S. District Court for the District of Columbia entered the consent decree on May 22, 2019. The consent decree is not an admission of any wrongdoing by the Company and does not subject ~~Sinclair~~the Company to any monetary damages or penalties. The Company believes that even if the pacing information was shared as alleged, it would not have impacted any pricing of advertisements or the competitive nature of the market. The consent decree requires the Company to adopt certain antitrust compliance measures, including the appointment of an Antitrust Compliance Officer, consistent with what the ~~Department of Justice~~DOJ has required in previous consent decrees in other industries. The consent decree also requires the Company's stations not to exchange pacing and certain other information with other stations in their local markets, which the Company’s management has already instructed them not to do.

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The Company is aware of NaN putative class action lawsuits that were filed against the Company following published reports of the DOJ investigation into the exchange of pacing data within the industry. On October 3, 2018, these lawsuits were consolidated in the Northern District of Illinois. The consolidated action alleges that the Company and 13 other broadcasters conspired to fix prices for commercials to be aired on broadcast television stations throughout the United States and engaged in unlawful information sharing, in violation of the Sherman Antitrust Act. The consolidated action seeks damages, attorneys’ fees, costs and interest, as well as injunctions against adopting practices or plans that would restrain competition in the ways the plaintiffs have alleged.The Court denied the Defendants’ motion to dismiss on November 6, 2020.Since then, the Plaintiffs have served the Defendants with written discovery requests, and the Court has set a pretrial schedule ~~requiring~~which now requires discovery to be completed by ~~July 1,~~December 30, 2022 and briefing on class certification to be completed by ~~November 14, 2022.~~May 15, 2023. The Company believes the lawsuits are without merit and intends to vigorously defend itself against all such claims.

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7. EARNINGS PER SHARE:

The following table reconciles income (numerator) and shares (denominator) used in our computations of basic and diluted earnings per share for the periods presented (in millions, except share amounts which are reflected in thousands):


		Three Months Ended March 31,				Three Months Ended March 31,
		2021		2020				2022		2021
Income (Numerator)	Income (Numerator)						Income (Numerator)
Net income		$	26	$	151
Net income (loss)							Net income (loss)	$	2,616	$	26
Net income attributable to the redeemable noncontrolling interests	Net income attributable to the redeemable noncontrolling interests	(4)		(20)			Net income attributable to the redeemable noncontrolling interests	(4)		(4)
Net income attributable to the noncontrolling interests		(34)		(8)
Net loss (income) attributable to the noncontrolling interests							Net loss (income) attributable to the noncontrolling interests	(25)		(34)

Numerator for basic and diluted (loss) earnings per common share available to common shareholders		$	(12)	$	123
Numerator for basic and diluted earnings (loss) per common share available to common shareholders							Numerator for basic and diluted earnings (loss) per common share available to common shareholders	$	2,587	$	(12)

Shares (Denominator)	Shares (Denominator)						Shares (Denominator)
Basic weighted-average common shares outstanding	Basic weighted-average common shares outstanding	74,389		90,609			Basic weighted-average common shares outstanding	72,164		74,389
Dilutive effect of stock-settled appreciation rights and outstanding stock options	Dilutive effect of stock-settled appreciation rights and outstanding stock options	0		617			Dilutive effect of stock-settled appreciation rights and outstanding stock options	12		—
Diluted weighted-average common and common equivalent shares outstanding	Diluted weighted-average common and common equivalent shares outstanding	74,389		91,226			Diluted weighted-average common and common equivalent shares outstanding	72,176		74,389

The following table shows the weighted-average stock-settled appreciation rights and outstanding stock options (in thousands) that are excluded from the calculation of diluted earnings per common share as the inclusion of such shares would be anti-dilutive:

Three Months Ended
March 31,
2021 2020
Weighted-average stock-settled appreciation rights and outstanding stock options excluded 1,703 2,814


	Three Months Ended March 31,
	2022	2021
Weighted-average stock-settled appreciation rights and outstanding stock options excluded	2,545	1,703

2120

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8. SEGMENT DATA:

~~We measure~~During the period ended March 31, 2022, we measured segment performance based on operating income (loss). We have 2 reportable segments: broadcast and local sports. Our broadcast segment ~~previously referred to as our local news and marketing services segment,~~ provides free over-the-air programming to television viewing audiences and includes stations in 8786 markets located throughout the continental United States. Our local sports segment ~~previously referred to as our sports segment, provides~~provided viewers with live professional sports content and ~~includes~~included our Bally RSNs, Marquee, and our investment in the YES ~~Network.~~Network, prior to the Deconsolidation on March 1, 2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies. Other and corporate are not reportable segments but are included for reconciliation purposes. Other primarily consists of original networks and content, including Tennis, non-broadcast digital and internet solutions, technical services, and other non-media investments. Corporate costs primarily include our costs to operate as a public company and to operate our corporate headquarters location. All of our businesses are located within the United States.

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Segment financial information is included in the following tables for the periods presented (in millions):


As of March 31, 2021		Broadcast		Local sports		Other & Corporate		Eliminations		Consolidated
As of March 31, 2022												As of March 31, 2022	Broadcast		Local sports (d)		Other & Corporate			Eliminations		Consolidated
Assets	Assets	$	4,800	$	6,222	$	2,121	$	(11)	$	13,132	Assets	$	4,854	$	—	$	1,808	(e)	$	—	$	6,662


For the three months ended March 31, 2021		Broadcast		Local sports		Other & Corporate		Eliminations			Consolidated
For the three months ended March 31, 2022													For the three months ended March 31, 2022	Broadcast			Local sports (d)		Other & Corporate			Eliminations			Consolidated
Revenue	Revenue	$	665	$	768	$	108	$	(30)	(a)	$	1,511	Revenue	$	721	(b)	$	482	$	134		$	(49)	(a)	$	1,288
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	62		84		8		(1)			153		Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	60			54		8			(1)			121
Amortization of sports programming rights	Amortization of sports programming rights	0		552		0		0			552		Amortization of sports programming rights	—			326		—			—			326
Amortization of program contract costs	Amortization of program contract costs	21		0		2		0			23		Amortization of program contract costs	20			—		5			—			25
Corporate general and administrative expenses	Corporate general and administrative expenses	55		3		3		0			61		Corporate general and administrative expenses	43			1		3			—			47
Gain on deconsolidation of subsidiary													Gain on deconsolidation of subsidiary	—			—		(3,357)		(c)	—			(3,357)
(Gain) loss on asset dispositions and other, net of impairment	(Gain) loss on asset dispositions and other, net of impairment	(14)		0		0		0			(14)		(Gain) loss on asset dispositions and other, net of impairment	(5)			—		—			—			(5)

Operating income (loss)	Operating income (loss)	63		(41)		13		0			35		Operating income (loss)	97			(4)		3,372			1			3,466
Interest expense including amortization of debt discount and deferred financing costs	Interest expense including amortization of debt discount and deferred financing costs	1		108		45		(3)			151		Interest expense including amortization of debt discount and deferred financing costs	1			72		47			(5)			115
Income (loss) from equity method investments		0		13		(4)		0			9
Income from equity method investments													Income from equity method investments	—			10		2			—			12


For the three months ended March 31, 2020		Broadcast		Local sports		Other & Corporate		Eliminations			Consolidated
For the three months ended March 31, 2021													For the three months ended March 31, 2021	Broadcast		Local sports		Other & Corporate		Eliminations			Consolidated
Revenue	Revenue	$	701	$	812	$	128	$	(32)	(a)	$	1,609	Revenue	$	665	$	768	$	108	$	(30)	(a)	$	1,511
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	58		110		6		0			174		Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	62		84		8		(1)			153
Amortization of sports programming rights	Amortization of sports programming rights	0		391		0		0			391		Amortization of sports programming rights	—		552		—		—			552
Amortization of program contract costs	Amortization of program contract costs	23		0		0		0			23		Amortization of program contract costs	21		—		2		—			23
Corporate general and administrative expenses	Corporate general and administrative expenses	44		2		3		0			49		Corporate general and administrative expenses	55		3		3		—			61
Gain on asset dispositions and other, net of impairment	Gain on asset dispositions and other, net of impairment	(32)		0		0		0			(32)		Gain on asset dispositions and other, net of impairment	(14)		—		—		—			(14)

Operating income (loss)	Operating income (loss)	152		165		19		(9)			327		Operating income (loss)	63		(41)		13		—			35
Interest expense including amortization of debt discount and deferred financing costs	Interest expense including amortization of debt discount and deferred financing costs	1		123		59		(3)			180		Interest expense including amortization of debt discount and deferred financing costs	1		108		45		(3)			151
Income (loss) from equity method investments	Income (loss) from equity method investments	0		6		(12)		0			(6)		Income (loss) from equity method investments	—		13		(4)		—			9

(a)Includes $24 million and $27 ~~millionand$24~~ million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, of revenue ~~and selling, general, and administrative expenses, respectively,~~ for services provided by broadcast to local sports and other, and $22 million for the three months ended March 31, 2022, of revenue for services provided by other to broadcast, which are eliminated in consolidation.

(b)Includes $5 million for the three months ended March 31, 2022 of revenue for services provided by broadcast to local sports, which are no longer treated as intercompany transactions subsequent to the Deconsolidation. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

(c)Represents the gain recognized on the Deconsolidation. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

(d)Represents the activity prior to the Deconsolidation on March 1, 2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

(e)Includes the note receivable due to the Company outstanding under the A/R facility of approximately $163 million. See Long Term Note Receivable within Note. 3 Other Assets.

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9. VARIABLE INTEREST ENTITIES:

Certain of our stations provide services to other station owners within the same respective market through agreements, such as LMAs, where we provide programming, sales, operational, and administrative services, and JSAs and SSAs, where we provide non-programming, sales, operational, and administrative services. In certain cases, we have also entered into purchase agreements or options to purchase the license related assets of the licensee. We typically own the majority of the non-license assets of the stations, and in some cases where the licensee acquired the license assets concurrent with our acquisition of the non-license assets of the station, we have provided guarantees to the bank for the licensee’s acquisition financing. The terms of the agreements vary, but generally have initial terms of over five years with several optional renewal terms. Based on the terms of the agreements and the significance of our investment in the stations, we are the primary beneficiary when, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIE through the services we provide and we absorb losses and returns that would be considered significant to the VIEs. The fees paid between us and the licensees pursuant to these arrangements are eliminated in consolidation.

~~We are~~A subsidiary of DSIH is a party to a joint venture associated with Marquee. Marquee is party to a long term telecast rights agreement which provides the rights to air certain live game telecasts and other content, which we guarantee. In connection with a prior acquisition, we became party to a joint venture associated with one other regional sports network. ~~We participate~~DSIH participated significantly in the economics and ~~have~~had the power to direct the activities which significantly ~~impact~~impacted the economic performance of these regional sports networks, including sales and certain operational services. ~~We consolidate~~As of December 31, 2021, we consolidated these regional sports networks because they ~~are~~were variable interest entities and we ~~are~~were the primary beneficiary. As of March 1, 2022, as a result of the Deconsolidation, we no longer consolidate these regional sports networks. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

The carrying amounts and classification of the assets and liabilities of the VIEs mentioned above, which have been included in our consolidated balance sheets as of the dates presented, were as follows (in millions):


		As of March 31, 2021		As of December 31, 2020			As of March 31, 2022		As of December 31, 2021
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	45	$	64	Cash and cash equivalents	$	—	$	43

Accounts receivable, net	Accounts receivable, net	57		70		Accounts receivable, net	47		83
Prepaid sports rights	Prepaid sports rights	46		2		Prepaid sports rights	—		2
Other current assets	Other current assets	4		5		Other current assets	3		4
Total current assets	Total current assets	152		141		Total current assets	50		132

Property and equipment, net	Property and equipment, net	15		16		Property and equipment, net	8		17
Operating lease assets	Operating lease assets	6		6		Operating lease assets	—		5
Goodwill and indefinite-lived intangible assets	Goodwill and indefinite-lived intangible assets	15		15		Goodwill and indefinite-lived intangible assets	15		15
Definite-lived intangible assets, net	Definite-lived intangible assets, net	52		54		Definite-lived intangible assets, net	45		47
Other assets	Other assets	1		1		Other assets	—		1
Total assets	Total assets	$	241	$	233	Total assets	$	118	$	217

LIABILITIES	LIABILITIES					LIABILITIES
Current liabilities:	Current liabilities:					Current liabilities:

Other current liabilities	Other current liabilities	$	45	$	40	Other current liabilities	$	22	$	62

Long-term liabilities:						Long-term liabilities:

Notes payable, finance leases and commercial bank financing, less current portion		9		10
Operating lease liabilities, less current portion	Operating lease liabilities, less current portion	5		5		Operating lease liabilities, less current portion	—		4
Program contracts payable, less current portion	Program contracts payable, less current portion	3		4		Program contracts payable, less current portion	1		2
Other long-term liabilities	Other long-term liabilities	11		17		Other long-term liabilities	3		4
Total liabilities	Total liabilities	$	73	$	76	Total liabilities	$	26	$	72

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The amounts above represent the ~~consolidated~~combined assets and liabilities of the VIEs described above, for which we are the primary beneficiary. Total liabilities associated with certain outsourcing agreements and purchase options with certain VIEs, which are excluded from the above, were ~~$125~~$128 million and ~~$131~~$127 million as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, as these amounts are eliminated in consolidation. The assets of each of these consolidated VIEs can only be used to settle the obligations of the VIE. As of March 31, ~~2021,~~2022, all of the liabilities are non-recourse to us except for the debt of certain VIEs. See Debt of variable interest entities and guarantees of third-party ~~debt~~obligations under Note 4. Notes Payable, Finance Leases, and Commercial Bank Financing for further discussion. The risk and reward characteristics of the VIEs are similar.

Other VIEs

We have several investments in entities which are considered VIEs. However, we do not participate in the management of these entities, including the day-to-day operating decisions or other decisions which would allow us to control the entity, and therefore, we are not considered the primary beneficiary of these VIEs.

In conjunction with the Transaction, the composition of the DSIH board of managers was modified resulting in the Company’s loss of voting control over the entity. The Company holds substantially all of the equity of DSIH and provides certain management and general and administrative services to DSIH. However, it was determined that the Company is not the primary beneficiary because it lacks the ability to control the activities that most significantly drive the economics of the business. The carrying amount of our investment in DSIH is zero and there is no obligation for the Company to provide additional financial support. The Company is also party to an A/R facility which had an outstanding balance of approximately $163 million as of March 31, 2022. See Note Receivable within Note. 3 Other Assets. The amounts drawn under the A/R facility represent the Company’s maximum loss exposure

The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary were ~~$83~~$171 million and ~~$75~~$175 million as of March 31, ~~2021~~2022 and December 31, ~~2020, respectively.~~2021, respectively, and are included in other assets in our consolidated balance sheets. See Note 3. Other Assets for more information related to our equity investments. Our maximum exposure is equal to the carrying value of our investments. The income and loss related to equity method investments and other investments are recorded in income ~~(loss)~~ from equity method investments and other (expense) income, net, respectively, in our consolidated statements of operations. We recorded gains of $20 million and losses of $4 ~~million and $12~~ million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, related to these investments.

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10. RELATED PERSON TRANSACTIONS:

Transactions with our controlling shareholders

David, Frederick, J. Duncan, and Robert Smith (collectively, the ~~controlling shareholders)~~"controlling shareholders") are brothers and hold substantially all of our Class B Common Stock and some of our Class A Common Stock. We engaged in the following transactions with them and/or entities in which they have substantial interests:

Leases. Certain assets used by us and our operating subsidiaries are leased from entities owned by the controlling shareholders. Lease payments made to these entities were $2 million and $1 million for ~~both~~ the three months ended March 31, 2022 and 2021, ~~and 2020.~~respectively. For further information, see Note 4. Notes Payable, Finance Leases, and Commercial Bank Financing.

Charter Aircraft. We lease aircraft owned by certain controlling shareholders. For all leases, we incurred expenses of less than $1 million for both the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021.

Cunningham Broadcasting Corporation

Cunningham owns a portfolio of television stations, including: WNUV-TV Baltimore, Maryland; WRGT-TV Dayton, Ohio; WVAH-TV Charleston, West Virginia; WMYA-TV Anderson, South Carolina; WTTE-TV Columbus, Ohio; WDBB-TV Birmingham, Alabama; WBSF-TV Flint, Michigan; WGTU-TV/WGTQ-TV Traverse City/Cadillac, Michigan; WEMT-TV Tri-Cities, Tennessee; WYDO-TV Greenville, North Carolina; KBVU-TV/KCVU-TV Eureka/Chico-Redding, California; WPFO-TV Portland, Maine; and KRNV-DT/KENV-DT Reno, Nevada/Salt Lake City, Utah (collectively, the ~~Cunningham Stations)~~"Cunningham Stations"). Certain of our stations provide services to the Cunningham Stations pursuant to LMAs or JSAs and SSAs. See Note 9. Variable Interest Entities, for further discussion of the scope of services provided under these types of arrangements. As of March 31, ~~2021,~~2022, we have jointly and severally, unconditionally, and irrevocably guaranteed ~~$40~~$36 million of Cunningham's debt, of which $8$7 million, net of ~~$0.3~~$0.1 million deferred financing costs, relates to the Cunningham VIEs that we consolidate.

~~The voting stock~~

Table of ~~Cunningham is owned by an unrelated party.~~ Contents

All of the non-voting stock of the Cunningham Stations is owned by trusts for the benefit of the children of our controlling shareholders. We consolidate certain subsidiaries of Cunningham with which we have variable interests through various arrangements related to the Cunningham Stations.

The services provided to WNUV-TV, WMYA-TV, WTTE-TV, WRGT-TV and WVAH-TV are governed by a master agreement which has a current term that expires on July 1, 2023 and there are 2 additional ~~5-year~~five-year renewal terms remaining with final expiration on July 1, 2033. We also executed purchase agreements to acquire the license related assets of these stations from Cunningham, which grant us the right to acquire, and grant Cunningham the right to require us to acquire, subject to applicable FCC rules and regulations, 100% of the capital stock or the assets of these individual subsidiaries of Cunningham. Pursuant to the terms of this agreement we are obligated to pay Cunningham an annual fee for the television stations equal to the greater of (i) 3% of each station’s annual net broadcast revenue or (ii) $5 million. The aggregate purchase price of these television stations increases by 6% annually. A portion of the fee is required to be applied to the purchase price to the extent of the 6% increase. The cumulative prepayments made under these purchase agreements were ~~$55 million and $54~~$58 million as of both March 31, ~~2021~~2022 and December 31, ~~2020, respectively.~~2021. The remaining aggregate purchase price of these stations, net of prepayments, as of both March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, was approximately $54 million. Additionally, we provide services to WDBB-TV pursuant to an LMA, which expires April 22, 2025, and have a purchase option to acquire for $0.2 million. We paid Cunningham, under these agreements $3 million ~~and $2 million~~ for both the three months ended March 31, ~~2021~~2022 and ~~2020, respectively.~~2021.

The agreements with KBVU-TV/KCVU-TV, KRNV-DT/KENV-DT, WBSF-TV, WEMT-TV, WGTU-TV/WGTQ-TV, WPFO-TV, and WYDO-TV expire between May 2023 and November ~~2021 and December 2028~~2029 and certain stations have renewal provisions for successive eight-year periods.

As we consolidate the licensees as VIEs, the amounts we earn or pay under the arrangements are eliminated in consolidation and the gross revenues of the stations are reported in our consolidated statements of operations. Our consolidated revenues include ~~$36~~$34 million and ~~$39~~$36 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, related to the Cunningham Stations.

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We have an agreement with Cunningham to provide master control equipment and provide master control services to a station in Johnstown, PA with which Cunningham has an LMA that expires in June 2022. Under the agreement, Cunningham paid us an initial fee of $1 million and pays us $0.2 million annually for master control services plus the cost to maintain and repair the equipment. In addition, we have an agreement with Cunningham to provide a news share service with the Johnstown, PA station for an annual fee of $1$0.5 million, ~~that~~which increases by 3% on each anniversary and expires in ~~December 2021.~~November 2024.

Atlantic Automotive Corporation

We sell advertising time to Atlantic Automotive Corporation ~~(Atlantic Automotive)~~("Atlantic Automotive"), a holding company that owns automobile dealerships and an automobile leasing company. David D. Smith, our Executive Chairman, has a controlling interest in, and is a member of the Board of Directors of, Atlantic Automotive. We received payments for advertising totaling less than $0.1 million for both the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021.

Leased property by real estate ventures

Certain of our real estate ventures have entered into leases with entities owned by members of the Smith Family. Total rent payments received under these leases was $0.2 million for both the three months ended March 31, 2022 and ~~$0.3~~2021.

Diamond Sports Intermediate Holdings LLC

As of March 1, 2022, we account for our equity interest in DSIH as an equity method investment. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

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Management Services Agreement. In 2019, we entered into a management services agreement with DSG, a wholly-owned subsidiary of DSIH, in which we provide DSG with affiliate sales and marketing services and general and administrative services. The contractual annual amount due from DSG for these services during the fiscal year ended December 31, 2022 is $75 million, which is subject to increases on an annual basis. Additionally, the agreement contains an incentive fee payable to us calculated based on certain terms contained within new or renewed distribution agreements with Distributors. As a condition to the Transaction, DSG will defer the cash payment of a portion of its management fee payable to the Company over the next five years. Pursuant to this agreement, the broadcast segment recorded $28 million of revenue for the three months ended March 31, ~~2021 and 2020, respectively.~~2022, of which $24 million was eliminated in consolidation prior to the Deconsolidation. We will not recognize the portion of deferred management fees as revenue until such fees are determined to be collectible.

Distributions. DSIH made distributions to DSH for tax payments on the dividends of the Redeemable Subsidiary Preferred Equity totaling $1 million during the three months ended March 31, 2022.

Note receivable. We received a payment of $50 million from DSPV during the three months ended March 31, 2022 related to the note receivable associated with the A/R facility.

During the three months ended March 31, 2022 we recorded both revenue and expenses of $1 million within other related to certain other transactions between DSIH and the Company.

Other equity method investees

YES Network. In August 2019, YES Network, which was an equity method investee prior to the Deconsolidation, entered into a management services agreement with the Company, in which the Company provides certain services for an initial term that expires on August 29, 2025. The agreement will automatically renew for 2 2-year renewal terms, with a final expiration on August 29, 2029. Pursuant to the terms of the agreement, the YES Network paid us a management services fee of $1 million ~~for~~in both the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

~~We have~~Prior to the Deconsolidation, we had a minority interest in certain mobile production businesses, which we ~~account~~accounted for as equity method investments. We made payments to these businesses for production services totaling $5 million and $8 million for the three months ended March 31, 2022 and 2021, respectively. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and ~~$7 million for the three months ended March 31, 2020.~~Summary of Significant Accounting Policies.

We have a minority interest in a sports marketing company, which we account for as an equity method investment. We made payments to this business for marketing services totaling $2 million and $3 million for the three months ended March 31, 2022 and 2021.

Sports Programming Rights

~~As of March 31, 2021,~~Prior to the Deconsolidation, affiliates of 6 professional teams ~~have~~had non-controlling equity interests in certain of our RSNs. ~~These agreements expire on various dates during the years ended 2025 through 2032.~~ The Company paid $61 million and $120 million, net of rebates, for the three months ended March 31, 2022 and 2021, ~~and $70 million for the three months ended March 31, 2020~~respectively, under sports programming rights agreements covering the broadcast of regular season games associated with these professional ~~teams who have non-controlling equity interests in certain~~teams. See Deconsolidation of ~~our RSNs.~~Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

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Employees

Jason Smith, an employee of the Company, is the son of Frederick Smith, a Vice President of the Company and a member of the Company's Board of Directors. Jason Smith received total compensation of $0.1 million, during the three months ended March 31, 2022, consisting of salary, and less than $0.1 million ~~consisting of salary and bonus, for both~~during the three months ended March 31, 2021, consisting of salary and ~~2020,~~bonus, and was granted a2,239 shares of restricted stock, ~~award with respect to 2,239 and 355 shares,~~ vesting over two years, ~~for~~during the three months ended March 31, ~~2021 and 2020, respectively.~~2021. Amberly Thompson, an employee of the Company, is the daughter of Donald Thompson, Executive Vice President and Chief Human Resources Officer of the Company. Amberly Thompson received total compensation of less than $0.1 million ~~consisting of salary and bonus,~~ for both the three months ended March 31, 2022 and 2021, consisting of salary and ~~2020.~~bonus. Edward Kim, an employee of the company, is the brother-in-law of Christopher Ripley, President and Chief Executive Officer of the Company. Edward Kim received total compensation of less than $0.1 million ~~consisting of salary,~~ for both the three months ended March 31, ~~2021.~~2022 and 2021, consisting of salary, and was granted 302 shares of restricted stock, vesting over two years, during the three months ended March 31, 2022.

Frederick Smith, a Vice President of the Company and a member of the Company’s Board of Directors, is the brother of David Smith, Executive Chairman of the Company and Chairman of the Company’s Board of Directors; J. Duncan Smith, a Vice President of the Company and Secretary of the Company’s Board of Directors; and Robert Smith, a member of the Company’s Board of Directors. Frederick Smith received total compensation of $0.2 million for both the three months ended March 31, 2022 and 2021, consisting of salary and bonus. J. Duncan Smith, a Vice President of the Company and Secretary of the Company’s Board of Directors, is the brother of David Smith, Executive Chairman of the Company and Chairman of the Company’s Board of Directors; Frederick Smith, a Vice President of the Company and a member of the Company’s Board of Directors; and Robert Smith, a member of the Company’s Board of Directors. J. Duncan Smith received total compensation of $0.2 million for both the three months ended March 31, 2022 and 2021, consisting of salary and bonus.

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11. FAIR VALUE MEASUREMENTS:

Accounting guidance provides for valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). A fair value hierarchy using three broad levels prioritizes the inputs to valuation techniques used to measure fair value. The following is a brief description of those three levels:

•Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

•Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

•Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

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The following table sets forth the carrying value and fair value of our financial assets and liabilities for the periods presented (in millions):


		As of March 31, 2021				As of December 31, 2020					As of March 31, 2022				As of December 31, 2021
		Carrying Value		Fair Value		Carrying Value		Fair Value			Carrying Value		Fair Value		Carrying Value		Fair Value
Level 1:	Level 1:									Level 1:
Investments in equity securities	Investments in equity securities	$	88	$	88	$	68	$	68	Investments in equity securities	$	6	$	6	$	5	$	5
STG:	STG:									STG:
Money market funds	Money market funds	495		495		448		448		Money market funds	400		400		265		265
Deferred compensation assets	Deferred compensation assets	46		46		42		42		Deferred compensation assets	46		46		48		48
Deferred compensation liabilities	Deferred compensation liabilities	38		38		36		36		Deferred compensation liabilities	36		36		38		38
DSG:
DSG (a):										DSG (a):
Money market funds	Money market funds	160		160		292		292		Money market funds	—		—		101		101

Level 2 (a):
STG:
5.875% Senior Unsecured Notes due 2026		348		356		348		358

5.500% Senior Unsecured Notes due 2030		500		487		500		520
5.125% Senior Unsecured Notes due 2027		400		391		400		408
Level 2:										Level 2:
Investments in equity securities (b)										Investments in equity securities (b)	92		92		114		114
STG (c):										STG (c):
5.875% Senior Notes due 2026 (d)										5.875% Senior Notes due 2026 (d)	348		339		348		357
5.500% Senior Notes due 2030										5.500% Senior Notes due 2030	500		435		500		489
5.125% Senior Notes due 2027										5.125% Senior Notes due 2027	400		365		400		391
4.125% Senior Secured Notes due 2030	4.125% Senior Secured Notes due 2030	750		723		750		770		4.125% Senior Secured Notes due 2030	750		670		750		712
Term Loan B(d)	Term Loan B(d)	1,119		1,107		1,119		1,107		Term Loan B(d)	379		373		379		373
Term Loan B-2	Term Loan B-2	1,281		1,258		1,284		1,264		Term Loan B-2	1,268		1,229		1,271		1,239
Term Loan B-3										Term Loan B-3	734		717		736		722

DSG:
DSG (a) (c):										DSG (a) (c):
12.750% Senior Secured Notes due 2026	12.750% Senior Secured Notes due 2026	31		27		31		28		12.750% Senior Secured Notes due 2026	—		—		31		17
6.625% Senior Unsecured Notes due 2027	6.625% Senior Unsecured Notes due 2027	1,744		921		1,744		1,056		6.625% Senior Unsecured Notes due 2027	—		—		1,744		490
5.375% Senior Secured Notes due 2026	5.375% Senior Secured Notes due 2026	3,050		2,196		3,050		2,483		5.375% Senior Secured Notes due 2026	—		—		3,050		1,525
Term Loan	Term Loan	3,251		2,243		3,259		2,884		Term Loan	—		—		3,226		1,484
Accounts Receivable Securitization Facility		173		173		177		177

Debt of variable interest entities		16		16		17		17
Debt of non-media subsidiaries		17		17		17		17
Debt of variable interest entities (c)										Debt of variable interest entities (c)	9		9		9		9
Debt of non-media subsidiaries (c)										Debt of non-media subsidiaries (c)	17		17		17		17

Level 3	Level 3									Level 3

Options and warrants (b)		435		435		332		332
Investments in equity securities (e)										Investments in equity securities (e)	226		226		282		282

(a)The debt of DSG, a wholly-owned subsidiary of DSIH, was deconsolidated from the Company's balance sheet as part of the Deconsolidation. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

~~(a)~~(b)Consists of unrestricted warrants to acquire marketable common equity securities. The fair value of the warrants are derived from the quoted trading prices of the underlying common equity securities less the exercise price.

(c)Amounts are carried in our consolidated balance sheets net of debt discount, premium, and deferred financing cost, which are excluded in the above table, of ~~$176~~$44 million and ~~$183~~$158 million as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

~~(b)~~(d)In April 2022, the Term Loan B was refinanced and the 5.875% Senior Notes due 2026 were redeemed. See Note 13. Subsequent Events.

(e)On November 18, 2020, we entered into a commercial agreement with Bally's Corporation ("Bally's") and received warrants and options to acquire common equity in the business. During the three months ended March 31, 2022 and 2021 we recorded a fair value adjustment loss of $56 million and a fair value adjustment gain of $103 million, ~~of fair value adjustments~~respectively, related to these interests. The fair value of the warrants is primarily derived from the quoted trading prices of the underlying common equity adjusted for a ~~25%~~16% discount for lack of marketability ~~(DLOM).~~("DLOM") as of March 31, 2022 and December 31, 2021, respectively. The fair value of the options is derived utilizing the Black Scholes valuation model. The most significant inputs include the trading price of the underlying common stock, the exercise price of the options, which range from $30 to $45 per share, and a DLOM of ~~25%.~~16% as of March 31, 2022 and December 31, 2021, respectively. There are certain restrictions surrounding the sale and ownership of common stock and the Company has agreed not to sell any shares beneficially owned prior to the first anniversary of the agreement. The Company is also precluded from owning more than 4.9% of the outstanding common shares of Bally's, inclusive of shares obtained through the exercise of the warrants and options described above. ~~See~~ ~~Other Investments~~ ~~under~~ ~~Note 3. Other Assets~~ ~~for further discussion.~~

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The following table summarizes the changes in financial ~~liabilities~~assets measured at fair value on a recurring basis and categorized as Level 3 under the fair value hierarchy for the three months ended March 31, 2022 and 2021 (in millions):









	Options and Warrants
Fair value at December 31, 2021	$	282


Measurement adjustments	(56)
Fair value at March 31, 2022	$	226









	Options and Warrants
Fair value at December 31, 2020	$	332


Measurement adjustments	103
Fair value at March 31, 2021	$	435

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12. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

STG is the primary obligor under the ~~STG~~ Bank Credit Agreement, 5.875% Notes, 5.125% Notes, 5.500% Notes, and 4.125% Secured Notes (collectively, the Notes are referred to as the "STG Notes"). Our Class A Common Stock and Class B Common Stock as of March 31, ~~2021,~~2022, were obligations or securities of ~~the Company~~SBG and not obligations or securities of STG. ~~The Company~~SBG is a guarantor under the STG ~~Bank Credit Agreement, 5.875% Notes, 5.125% Notes, 5.500% Notes, and 4.125% Secured~~ Notes. As of March 31, ~~2021,~~2022, our consolidated total debt, net of deferred financing costs and debt discounts, of ~~$12,540~~$4,398 million included ~~$4,401~~$4,381 million related to STG and its subsidiaries of which the Company guaranteed ~~$4,363~~$4,344 million.

~~The Company,~~SBG, KDSM, LLC, a wholly-owned subsidiary of ~~the Company,~~SBG, and STG’s wholly-owned subsidiaries (guarantor subsidiaries) have fully and unconditionally guaranteed, subject to certain customary automatic release provisions, all of STG’s obligations. Those guarantees are joint and several. There are certain contractual restrictions on the ability of ~~the Company,~~SBG, STG, or KDSM, LLC to obtain funds from their subsidiaries in the form of dividends or loans.

The following condensed consolidating financial statements present the consolidated balance sheets, consolidated statements of operations and comprehensive income, and consolidated statements of cash flows of ~~the Company,~~SBG, STG, KDSM, LLC and the guarantor subsidiaries, the direct and indirect non-guarantor subsidiaries of ~~the Company~~SBG and the eliminations necessary to arrive at our information on a consolidated ~~basis.~~

~~These statements~~basis and are provided pursuant to the terms of certain of our debt agreements. Investments in the subsidiaries of SBG, STG, KDSM, LLC and the guarantor subsidiaries, the direct and indirect non-guarantor subsidiaries of SBG are presented in each column under the equity method of accounting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. As such, these condensed consolidating financial statements should be read in conjunction with the ~~disclosure requirements under SEC Regulation S-X, Rule 3-10.~~

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~~CONDENSED CONSOLIDATING BALANCE SHEET~~

~~AS OF MARCH 31, 2021~~

~~(in millions) (unaudited)~~

Sinclair
Broadcast
Group, Inc. Sinclair
Television
Group, Inc. Guarantor
Subsidiaries
and KDSM,
LLC Non-
Guarantor
Subsidiaries Eliminations Sinclair
Consolidated
Cash and cash equivalents $ 0 $ 504 $ 4 $ 433 $ 0 $ 941
Accounts receivable, net 0 0 546 512 0 1,058
Other current assets 4 54 389 597 (73) 971
Total current assets 4 558 939 1,542 (73) 2,970
Property and equipment, net 1 31 691 106 (25) 804
Investment in equity of consolidated subsidiaries 528 3,519 0 0 (4,047) 0
Restricted cash 0 0 1 3 0 4
Goodwill 0 0 2,081 10 0 2,091
Indefinite-lived intangible assets 0 0 136 14 0 150
Definite-lived intangible assets, net 0 0 1,224 4,316 (40) 5,500
Other long-term assets 180 1,720 271 1,701 (2,259) 1,613
Total assets $ 713 $ 5,828 $ 5,343 $ 7,692 $ (6,444) $ 13,132
Accounts payable and accrued liabilities $ 22 $ 138 $ 206 $ 176 $ (73) $ 469
Current portion of long-term debt 0 13 5 41 (1) 58
Other current liabilities 1 1 121 272 0 395
Total current liabilities 23 152 332 489 (74) 922
Long-term debt 700 4,335 32 8,448 (1,033) 12,482
Investment in deficit of consolidated subsidiaries 1,256 0 0 0 (1,256) 0
Other long-term liabilities 12 115 1,462 585 (1,448) 726
Total liabilities 1,991 4,602 1,826 9,522 (3,811) 14,130
Redeemable noncontrolling interests 0 0 0 188 0 188
Total Sinclair Broadcast Group (deficit) equity (1,278) 1,226 3,517 (2,107) (2,637) (1,279)
Noncontrolling interests in consolidated subsidiaries 0 0 0 89 4 93
Total liabilities, redeemable noncontrolling interests, and equity $ 713 $ 5,828 $ 5,343 $ 7,692 $ (6,444) $ 13,132

accompanying notes to consolidated financial statements.

Table of Contents

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF MARCH 31, 2022

(in millions) (unaudited)


	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations		Sinclair Consolidated
Cash and cash equivalents	$	54	$	415	$	1	$	51	$	—	$	521

Accounts receivable, net	—		—		561		59		—		620
Other current assets	6		79		296		23		(78)		326
Total current assets	60		494		858		133		(78)		1,467

Property and equipment, net	1		31		655		50		(22)		715

Investment in equity of consolidated subsidiaries	2,104		3,231		—		—		(5,335)		—

Goodwill	—		—		2,081		7		—		2,088
Indefinite-lived intangible assets	—		—		136		14		—		150
Definite-lived intangible assets, net	—		—		1,061		48		(34)		1,075
Other long-term assets	283		1,974		410		1,363		(2,863)		1,167
Total assets	$	2,448	$	5,730	$	5,201	$	1,615	$	(8,332)	$	6,662

Accounts payable and accrued liabilities	$	35	$	74	$	290	$	17	$	(24)	$	392
Current portion of long-term debt	—		20		7		10		(1)		36
Other current liabilities	2		4		134		80		(45)		175
Total current liabilities	37		98		431		107		(70)		603

Long-term debt	915		4,314		32		373		(1,272)		4,362

Other long-term liabilities	731		60		1,512		328		(1,821)		810
Total liabilities	1,683		4,472		1,975		808		(3,163)		5,775

Redeemable noncontrolling interests	—		—		—		184		—		184
Total Sinclair Broadcast Group equity	765		1,258		3,226		688		(5,172)		765
Noncontrolling interests in consolidated subsidiaries	—		—		—		(65)		3		(62)
Total liabilities, redeemable noncontrolling interests, and equity	$	2,448	$	5,730	$	5,201	$	1,615	$	(8,332)	$	6,662

Table of Contents

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, ~~2020~~2021

(in millions)


		Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations		Sinclair Consolidated			Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations		Sinclair Consolidated
Cash and cash equivalents	Cash and cash equivalents	$	0	$	458	$	0	$	801	$	0	$	1,259	Cash and cash equivalents	$	2	$	316	$	2	$	496	$	—	$	816
Accounts receivable, net	Accounts receivable, net	0		0		558		502		0		1,060		Accounts receivable, net	—		—		649		596		—		1,245
Other current assets	Other current assets	7		46		372		560		(87)		898		Other current assets	10		82		293		136		(111)		410
Total current assets	Total current assets	7		504		930		1,863		(87)		3,217		Total current assets	12		398		944		1,228		(111)		2,471

Property and equipment, net	Property and equipment, net	1		33		706		109		(26)		823		Property and equipment, net	1		31		664		161		(24)		833

Investment in equity of consolidated subsidiaries	Investment in equity of consolidated subsidiaries	430		3,549		0		0		(3,979)		0		Investment in equity of consolidated subsidiaries	451		3,448		—		—		(3,899)		—
Restricted cash	Restricted cash	0		0		0		3		0		3		Restricted cash	—		—		—		3		—		3
Goodwill	Goodwill	0		0		2,082		10		0		2,092		Goodwill	—		—		2,081		7		—		2,088
Indefinite-lived intangible assets	Indefinite-lived intangible assets	0		0		156		15		0		171		Indefinite-lived intangible assets	—		—		136		14		—		150
Definite-lived intangible assets, net	Definite-lived intangible assets, net	0		0		1,256		4,409		(41)		5,624		Definite-lived intangible assets, net	—		—		1,105		4,019		(36)		5,088
Other long-term assets	Other long-term assets	139		1,718		280		1,569		(2,254)		1,452		Other long-term assets	331		1,956		427		1,853		(2,659)		1,908
Total assets	Total assets	$	577	$	5,804	$	5,410	$	7,978	$	(6,387)	$	13,382	Total assets	$	795	$	5,833	$	5,357	$	7,285	$	(6,729)	$	12,541

Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	$	19	$	70	$	247	$	284	$	(87)	$	533	Accounts payable and accrued liabilities	$	31	$	85	$	295	$	279	$	(35)	$	655
Current portion of long-term debt	Current portion of long-term debt	0		13		5		41		(1)		58		Current portion of long-term debt	—		20		5		45		(1)		69
Other current liabilities	Other current liabilities	1		2		134		306		0		443		Other current liabilities	2		6		155		392		(77)		478
Total current liabilities	Total current liabilities	20		85		386		631		(88)		1,034		Total current liabilities	33		111		455		716		(113)		1,202

Long-term debt	Long-term debt	700		4,337		33		8,460		(1,037)		12,493		Long-term debt	915		4,317		33		8,488		(1,482)		12,271
Investment in deficit of consolidated subsidiaries	Investment in deficit of consolidated subsidiaries	1,118		0		0		0		(1,118)		0		Investment in deficit of consolidated subsidiaries	1,605		—		—		—		(1,605)		—
Other long-term liabilities	Other long-term liabilities	12		121		1,445		710		(1,438)		850		Other long-term liabilities	12		69		1,426		468		(1,398)		577
Total liabilities	Total liabilities	1,850		4,543		1,864		9,801		(3,681)		14,377		Total liabilities	2,565		4,497		1,914		9,672		(4,598)		14,050

Redeemable noncontrolling interests	Redeemable noncontrolling interests	0		0		0		190		0		190		Redeemable noncontrolling interests	—		—		—		197		—		197
Total Sinclair Broadcast Group (deficit) equity	Total Sinclair Broadcast Group (deficit) equity	(1,273)		1,261		3,546		(2,098)		(2,710)		(1,274)		Total Sinclair Broadcast Group (deficit) equity	(1,770)		1,336		3,443		(2,644)		(2,135)		(1,770)
Noncontrolling interests in consolidated subsidiaries	Noncontrolling interests in consolidated subsidiaries	0		0		0		85		4		89		Noncontrolling interests in consolidated subsidiaries	—		—		—		60		4		64
Total liabilities, redeemable noncontrolling interests, and equity	Total liabilities, redeemable noncontrolling interests, and equity	$	577	$	5,804	$	5,410	$	7,978	$	(6,387)	$	13,382	Total liabilities, redeemable noncontrolling interests, and equity	$	795	$	5,833	$	5,357	$	7,285	$	(6,729)	$	12,541

Table of Contents

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(in millions) (unaudited)


	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations		Sinclair Consolidated
Net revenue	$	—	$	29	$	791	$	531	$	(63)	$	1,288

Media programming and production expenses	—		—		362		412		(16)		758
Selling, general and administrative expenses	3		48		199		63		(46)		267
Gain on deconsolidation of subsidiary	(3,357)		—		—		—		—		(3,357)
Depreciation, amortization and other operating expenses	—		2		84		70		(2)		154
Total operating (gains) expenses	(3,354)		50		645		545		(64)		(2,178)

Operating income (loss)	3,354		(21)		146		(14)		1		3,466

Equity in (loss) earnings of consolidated subsidiaries	(38)		100		—		—		(62)		—
Interest expense	(4)		(44)		(1)		(75)		9		(115)
Other income (expense)	4		1		3		(50)		(6)		(48)

Total other (expense) income	(38)		57		2		(125)		(59)		(163)

Income tax (provision) benefit	(729)		20		(47)		69		—		(687)
Net income (loss)	2,587		56		101		(70)		(58)		2,616
Net income attributable to the redeemable noncontrolling interests	—		—		—		(4)		—		(4)
Net income attributable to the noncontrolling interests	—		—		—		(25)		—		(25)
Net income (loss) attributable to Sinclair Broadcast Group	$	2,587	$	56	$	101	$	(99)	$	(58)	$	2,587
Comprehensive income (loss)	$	2,587	$	56	$	101	$	(67)	$	(58)	$	2,619

Table of Contents

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(in millions) (unaudited)

Sinclair
Broadcast
Group, Inc. Sinclair
Television
Group, Inc. Guarantor
Subsidiaries
and KDSM,
LLC Non-
Guarantor
Subsidiaries Eliminations Sinclair
Consolidated
Net revenue $ 0 $ 27 $ 705 $ 818 $ (39) $ 1,511
Media programming and production expenses 0 1 348 684 (10) 1,023
Selling, general and administrative expenses 3 58 166 74 (27) 274
Depreciation, amortization and other operating expenses 0 2 74 105 (2) 179
Total operating expenses 3 61 588 863 (39) 1,476
Operating (loss) income (3) (34) 117 (45) 0 35
Equity in (loss) earnings of consolidated subsidiaries (45) 88 0 0 (43) 0
Interest expense (3) (42) (1) (111) 6 (151)
Other income (expense) 20 5 (12) 123 (3) 133
Total other (expense) income (28) 51 (13) 12 (40) (18)
Income tax benefit (provision) 19 7 (15) (2) 0 9
Net (loss) income (12) 24 89 (35) (40) 26
Net income attributable to the redeemable noncontrolling interests 0 0 0 (4) 0 (4)
Net income attributable to the noncontrolling interests 0 0 0 (34) 0 (34)
Net (loss) income attributable to Sinclair Broadcast Group $ (12) $ 24 $ 89 $ (73) $ (40) $ (12)
Comprehensive (loss) income $ (12) $ 24 $ 89 $ (27) $ (40) $ 34


	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations		Sinclair Consolidated
Net revenue	$	—	$	27	$	705	$	818	$	(39)	$	1,511

Media programming and production expenses	—		1		348		684		(10)		1,023
Selling, general and administrative expenses	3		58		166		74		(27)		274

Depreciation, amortization and other operating expenses	—		2		74		105		(2)		179
Total operating expenses	3		61		588		863		(39)		1,476

Operating (loss) income	(3)		(34)		117		(45)		—		35

Equity in (loss) earnings of consolidated subsidiaries	(45)		88		—		—		(43)		—
Interest expense	(3)		(42)		(1)		(111)		6		(151)

Other income (expense)	20		5		(12)		123		(3)		133
Total other (expense) income	(28)		51		(13)		12		(40)		(18)

Income tax benefit (provision)	19		7		(15)		(2)		—		9
Net (loss) income	(12)		24		89		(35)		(40)		26
Net income attributable to the redeemable noncontrolling interests	—		—		—		(4)		—		(4)
Net income attributable to the noncontrolling interests	—		—		—		(34)		—		(34)
Net (loss) income attributable to Sinclair Broadcast Group	$	(12)	$	24	$	89	$	(73)	$	(40)	$	(12)
Comprehensive (loss) income	$	(12)	$	24	$	89	$	(27)	$	(40)	$	34

3234

Table of Contents

CONDENSED CONSOLIDATING STATEMENT OF ~~OPERATIONS AND COMPREHENSIVE INCOME~~CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, ~~2020~~2022

(in millions) (unaudited)

Sinclair
Broadcast
Group, Inc. Sinclair
Television
Group, Inc. Guarantor
Subsidiaries
and KDSM,
LLC Non-
Guarantor
Subsidiaries Eliminations Sinclair
Consolidated
Net revenue $ 0 $ 24 $ 739 $ 893 $ (47) $ 1,609
Media programming and production expenses 0 0 328 516 (16) 828
Selling, general and administrative expenses 3 44 168 67 (23) 259
Depreciation, amortization and other operating expenses 0 1 51 147 (4) 195
Total operating expenses 3 45 547 730 (43) 1,282
Operating (loss) income (3) (21) 192 163 (4) 327
Equity in earnings of consolidated subsidiaries 129 173 0 0 (302) 0
Interest expense (3) (55) (1) (127) 6 (180)
Other (expense) income (2) (2) (9) 8 (3) (8)
Total other income (expense) 124 116 (10) (119) (299) (188)
Income tax benefit (provision) 2 29 (6) (13) 0 12
Net income 123 124 176 31 (303) 151
Net income attributable to the redeemable noncontrolling interests 0 0 0 (20) 0 (20)
Net income attributable to the noncontrolling interests 0 0 0 (8) 0 (8)
Net income attributable to Sinclair Broadcast Group $ 123 $ 124 $ 176 $ 3 $ (303) $ 123
Comprehensive income $ 123 $ 124 $ 176 $ 31 $ (303) $ 151


	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations		Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$	(5)	$	(45)	$	327	$	(209)	$	2	$	70

NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
Acquisition of property and equipment	—		(1)		(18)		(2)		—		(21)

Spectrum repack reimbursements	—		—		1		—		—		1
Proceeds from the sale of assets	—		—		4		—		—		4
Deconsolidation of subsidiary cash	—		—		—		(315)		—		(315)
Purchases of investments	(2)		(1)		(1)		(1)		—		(5)
Distributions from investments	50		—		10		10		—		70

Net cash flows from (used in) investing activities	48		(2)		(4)		(308)		—		(266)

NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES

Repayments of notes payable, commercial bank financing and finance leases	—		(5)		(1)		(1)		—		(7)
Repurchase of outstanding Class A Common Stock	(68)		—		—		—		—		(68)
Dividends paid on Class A and Class B Common Stock	(18)		—		—		—		—		(18)
Dividends paid on redeemable subsidiary preferred equity	—		—		—		(1)		—		(1)


Distributions to noncontrolling interests	—		—		—		(3)		—		(3)

Increase (decrease) in intercompany payables	100		151		(323)		74		(2)		—
Other, net	(5)		—		—		—		—		(5)
Net cash flows from (used in) financing activities	9		146		(324)		69		(2)		(102)

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	52		99		(1)		(448)		—		(298)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	2		316		2		499		—		819
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	54	$	415	$	1	$	51	$	—	$	521

3335

Table of Contents

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(in millions) (unaudited)

Sinclair
Broadcast
Group, Inc. Sinclair
Television
Group, Inc. Guarantor
Subsidiaries
and KDSM,
LLC Non-
Guarantor
Subsidiaries Eliminations Sinclair
Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES $ (18) $ 30 $ 113 $ (332) $ 1 $ (206)
NET CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES
Acquisition of property and equipment 0 0 (14) (7) 1 (20)
Acquisition of businesses, net of cash acquired 0 0 (2) 0 0 (2)
Spectrum repack reimbursements 0 0 14 0 0 14
Proceeds from the sale of assets 0 0 28 0 0 28
Purchases of investments (2) (10) (13) (24) 0 (49)
Other, net 0 0 (1) 4 0 3
Net cash flows (used in) from investing activities (2) (10) 12 (27) 1 (26)
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable and commercial bank financing 0 0 0 6 0 6
Repayments of notes payable, commercial bank financing and finance leases 0 (3) (2) (21) 0 (26)
Dividends paid on Class A and Class B Common Stock (15) 0 0 0 0 (15)
Dividends paid on redeemable subsidiary preferred equity 0 0 0 (4) 0 (4)
Distributions to noncontrolling interests 0 0 0 (30) 0 (30)
Distributions to redeemable noncontrolling interests 0 0 0 (2) 0 (2)
Increase (decrease) in intercompany payables 49 29 (118) 42 (2) 0
Other, net (14) 0 0 0 0 (14)
Net cash flows from (used in) financing activities 20 26 (120) (9) (2) (85)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 0 46 5 (368) 0 (317)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period 0 458 0 804 0 1,262
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period $ 0 $ 504 $ 5 $ 436 $ 0 $ 945


	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations		Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$	(18)	$	30	$	113	$	(332)	$	1	$	(206)

NET CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES
Acquisition of property and equipment	—		—		(14)		(7)		1		(20)
Acquisition of businesses, net of cash acquired	—		—		(2)		—		—		—
Spectrum repack reimbursements	—		—		14		—		—		14
Proceeds from the sale of assets	—		—		28		—		—		28
Purchases of investments	(2)		(10)		(13)		(24)		—		(49)

Other, net	—		—		(1)		4		—		(2)
Net cash flows (used in) from investing activities	(2)		(10)		12		(27)		1		(26)

NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable and commercial bank financing	—		—		—		6		—		6
Repayments of notes payable, commercial bank financing and finance leases	—		(3)		(2)		(21)		—		(26)

Dividends paid on Class A and Class B Common Stock	(15)		—		—		—		—		(15)
Dividends paid on redeemable subsidiary preferred equity	—		—		—		(4)		—		(4)


Distributions to noncontrolling interests, net	—		—		—		(30)		—		(30)
Distributions to redeemable noncontrolling interests	—		—		—		(2)		—		(2)
Increase (decrease) in intercompany payables	49		29		(118)		42		(2)		—
Other, net	(14)		—		—		—		—		(14)
Net cash flows from (used in) financing activities	20		26		(120)		(9)		(2)		(85)

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	—		46		5		(368)		—		(317)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	—		458		—		804		—		1,262
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	—	$	504	$	5	$	436	$	—	$	945

3436

Table of Contents

~~CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS~~

~~FOR THE THREE MONTHS ENDED MARCH 31, 2020~~

~~(in millions) (unaudited)~~

13. SUBSEQUENT EVENTS:

Sinclair
Broadcast
Group, Inc. Sinclair
Television
Group, Inc. Guarantor
Subsidiaries
and KDSM,
LLC Non-
Guarantor
Subsidiaries Eliminations Sinclair
Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES $ (115) $ (40) $ 154 $ (37) $ (1) $ (39)
NET CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment 0 (5) (41) (4) 4 (46)
Spectrum repack reimbursements 0 0 24 0 0 24
Proceeds from the sale of assets 0 0 18 0 0 18
Purchases of investments (1) (2) (12) (10) 0 (25)
Other, net 1 0 0 5 0 6
Net cash flows used in investing activities 0 (7) (11) (9) 4 (23)
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable and commercial bank financing 0 648 0 225 0 873
Repayments of notes payable, commercial bank financing and finance leases 0 (7) (1) (12) 0 (20)
Repurchase of outstanding Class A Common Stock (176) 0 0 0 0 (176)
Dividends paid on Class A and Class B Common Stock (18) 0 0 0 0 (18)
Redemption of redeemable subsidiary preferred equity 0 0 0 (198) 0 (198)
Distributions to noncontrolling interests, net 0 0 0 (3) 0 (3)
Distributions to redeemable noncontrolling interests 0 0 0 (378) 0 (378)
Increase (decrease) in intercompany payables 310 (111) (142) (54) (3) 0
Other, net (1) 0 0 (8) 0 (9)
Net cash flows from (used in) financing activities 115 530 (143) (428) (3) 71
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 0 483 0 (474) 0 9
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period 0 357 3 973 0 1,333
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period $ 0 $ 840 $ 3 $ 499 $ 0 $ 1,342

On April 14, 2022, we reached a distribution agreement with Charter Communications, Inc. for continued carriage of our owned local broadcast stations and Tennis Channel.

On April 21, 2022, STG entered into the Fourth Amendment (the "Fourth Amendment") to the Seventh Amended and Restated Credit Agreement, dated as of August 23, 2019, as amended (the "Amended Bank Credit Agreement") with JPMorgan Chase Bank, N.A., as administrative agent, the guarantors party thereto (the "Guarantors") and the lenders and other parties thereto.

Pursuant to the Fourth Amendment, STG raised Term B-4 Loans in an aggregate principal amount of $750 million (the "Term B-4 Loans"). The Term B-4 Loans mature in April 2029. The Term B-4 Loans were issued at 97% of par and bear interest, at STG’s option, at Term SOFR plus 3.75% (subject to customary credit spread adjustments) or base rate plus 2.75%. The proceeds from the Term B-4 Loans were used to refinance all of STG’s outstanding Term Loan B and to redeem STG’s outstanding 5.875% Senior Notes due 2026. In addition, the maturity of $612.5 million of the revolving commitments under the Bank Credit Agreement were extended to April 2027 pursuant to the Fourth Amendment.

In May 2022, our Board of Directors declared a quarterly dividend of $0.25 per share, payable on June 15, 2022 to holders of record at the close of business on June 1, 2022.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This report includes or incorporates forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the ~~Exchange Act)~~"Exchange Act"), and the U.S. Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about us, including, among other things, the following risks:

COVID-19 risks

•The suspension, and possible cancellation, of ~~some or all of the MLB, NBA and NHL seasons, and~~ tennis tournaments;

•~~the requirement of our RSNs to pay professional sports team minimum rights fees, but thereafter being unable to obtain rebates from sports teams for fewer games played;~~

•the need to reimburse Distributors affiliation fees related to canceled professional sporting events;

•loss of advertising revenue due to (i) ~~postponement or cancellation of professional sporting events, (ii)~~ reluctance of advertisers to purchase advertising spots due to reduced consumer spending as a result of shelter in place and stay at home orders, or lower audience engagement, ~~(iii)~~(ii) potential reduced need for advertisers to advertise for certain goods or services with low supply, due to interruptions in the supply chain, and ~~(iv)~~(iii) adverse business conditions affecting our customers, including our advertisers’ going out of business;

•the significant disruption to the operations of the professional sports leagues and the macroeconomy caused by COVID-19 may result in the recognition of further impairment charges on our goodwill and definite-lived intangible assets;

•we may be unable to access debt and equity capital on favorable terms, if at all, or a severe disruption and instability in the global financial markets or deterioration in credit and financing conditions may affect our access to capital necessary to fund business operations, pursue acquisition and development opportunities, refinance existing debt, and increase our future interest expense;

•the interruption to global supply chains caused by COVID-19 could impact our ability to ~~migrate off~~acquire and replace equipment necessary for the continuity of ~~various transition services provided by the seller of acquired assets which we rely upon to conduct~~ our ~~business in the local sports segment;~~business;

•the potential ~~that~~effects of COVID-19 on our workforce, ~~may~~including the impact in our operations because employees either contract COVID-19 ~~which could impact operations and increase~~or leave the workforce, increased health care ~~costs;~~cost, increased wages due to wage inflation and an inability to attract and retain a quality workforce; and

•cybersecurity and operational risks as a result of work-from-home arrangements.

Industry risks

•The business conditions of our advertisers, particularly in the political, automotive and service categories;

•the performance of networks and syndicators that provide us with programming content, as well as the performance of internally originated programming;

•subscriber churn due to the impact of technological changes and the proliferation of over-the-top ~~(OTT)~~("OTT") direct to consumer platforms;

•the loss of appeal of our local news, network content, syndicated program content and sports programming, which may be ~~unpredictable, and the impact of strikes caused by collective bargaining between players and sports leagues;~~unpredictable;

•the availability and cost of programming from ~~leagues and professional teams,~~ networks and syndicators, as well as the cost of internally originated programming;

•the availability and cost of rights to air professional tennis tournaments;

•our relationships with networks and their strategies to distribute their programming via means other than their local television affiliates, such as OTT or direct-to-consumer content;

•labor disputes and legislation and other union activity associated with film, acting, writing, and other ~~guilds and professional sports leagues;~~guilds;

•the broadcasting community’s ability to develop and adopt a viable mobile digital broadcast television ~~(mobile DTV)~~("mobile DTV") strategy and platform, such as the adoption of a next generation broadcast standard ~~(NEXTGEN TV)~~("NEXTGEN TV"), and the consumer’s appetite for mobile television;

•the impact of programming payments charged by networks pursuant to their affiliation agreements with broadcasters requiring compensation for network programming;

•~~the availability and cost of programming from networks and syndicators, as well as the cost of internally originated programming;~~

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•the effects of declining live/appointment viewership as reported through rating systems and local television efforts to adopt and receive credit for same day viewing plus viewing on-demand thereafter;

•changes in television rating measurement methodologies that could negatively impact audience results;

•the ability of local Distributors to coordinate and determine local advertising rates as a consortium;

•the operation of low power devices in the broadcast spectrum, which could interfere with our broadcast; and

•the impact of Distributors and OTTs offering "skinny" programming bundles that may not include television broadcast stations ~~regional sports networks,~~ or other programming that we ~~distribute; and~~

•~~the ability to renew media rights agreements with various professional sports teams which have varying durations and terms that are at least as favorable as those in existence.~~distribute.

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Regulatory risks

•The effects of the FCC's National Broadband Plan, the impact of the repacking of our broadcasting spectrum, as a result of the incentive auction, within a limited timeframe and funding allocated;

•the potential for additional governmental regulation of broadcasting or changes in those regulations and court actions interpreting those regulations, including ownership regulations limiting over-the-air television's ability to compete effectively (including regulations relating to JSA, SSA, cross ownership rules, ~~and~~ the national ownership ~~cap)~~cap and the UHF discount), arbitrary enforcement of indecency regulations, retransmission consent regulations, and political or other advertising restrictions, such as payola rules;

•the impact of FCC and Congressional efforts which may restrict a television station's retransmission consent negotiations;

•the impact of FCC rules requiring broadcast stations to publish, among other information, political advertising rates online;

•the impact of foreign government rules related to digital and online assets; and

•the potential impact from the elimination of rules prohibiting mergers of the four major television networks.

Risks specific to us

•~~Our~~The impact of the war in Ukraine including related disruption to supply chains and the increased price of energy, all of which affect our operations as well as those of our advertisers;

•our ability to attract and maintain local, national, and network advertising and successfully participate in new sales channels such as programmatic and addressable advertising through business partnership ventures and the development of technology;

•our ability to service our debt obligations and operate our business under restrictions contained in our financing agreements;

•our ability to successfully implement and monetize our own content management system ~~(CMS)~~("CMS") designed to provide our viewers significantly improved content via the internet and other digital platforms;

•our ability to successfully renegotiate retransmission consent and distribution agreements for our existing and acquired businesses with favorable terms;

•the ability of stations which we consolidate, but do not negotiate on their behalf, to successfully renegotiate retransmission consent and affiliation fees (cable network fees) agreements;

•our ability to renew our FCC licenses;

•our ability to obtain FCC approval for any future acquisitions, as well as, in certain cases, customary antitrust clearance for any future acquisitions;

•our ability to identify media business investment opportunities and to successfully integrate any acquired businesses, as well as the success of our new content and distribution initiatives in a competitive environment, including CHARGE!, TBD, Comet, STIRR, ~~Marquee,~~ other original programming, mobile DTV and ~~mobile DTV;~~

•our ability to air all sports games in live format given the increased game counts in 2021 due to the NHL and NBA shifting games that would have been broadcast into the fourth quarter of 2020 into 2021;FAST channels;

•our ability to maintain our affiliation and programming service agreements with our networks and program service providers and at renewal, to successfully negotiate these agreements with favorable terms;

•our ability to ~~manage operational risks in joint venture arrangements related to our RSNs;~~

•~~our ability to~~ generate synergies and leverage new revenue opportunities;

•~~our ability to successfully migrate in a timely manner from various transition services provided by sellers of assets we have acquired, which includes standing up our own services;~~

•~~our ability to renew media rights agreements with various professional sports teams with favorable terms;~~

•changes in the makeup of the population in the areas where stations are located;

•our ability to effectively respond to technology affecting our industry;

•our ability to deploy NEXTGEN TV nationwide;

•the strength of ratings for our local news broadcasts including our news sharing arrangements; ~~and~~

•the results of prior year tax audits by taxing ~~authorities.~~authorities; and

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our ability to monetize our investments in real estate, venture capital and private equity holdings, and direct strategic investments in companies.

General risks

•The impact of changes in national and regional economies and credit and capital markets;

•loss of consumer confidence;

•the potential impact of changes in tax law;

•the activities of our competitors;

•terrorist acts of violence or war, such as the war in Ukraine, and other geopolitical events;

•natural disasters and pandemics that impact our Distributors, advertisers, ~~our~~suppliers, stations and networks; and

•~~operational risks associated with~~cybersecurity incidents, data ~~breaches~~privacy, and other ~~cyber threats.~~information technology failures have, and in the future, may, adversely affect us and disrupt our operations.

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Other matters set forth in this report, including the Risk Factors set forth in Item 1A of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, may also cause actual results in the future to differ materially from those described in the forward-looking statements. However, additional factors and risks not currently known to us or that we currently deem immaterial may also cause actual results in the future to differ materially from those described in the forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. In light of these risks, uncertainties, and assumptions, events described in the forward-looking statements discussed in this report might not occur.

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~~The following table sets forth certain operating data for the periods presented:~~

~~STATEMENTS OF OPERATIONS DATA~~

~~(in millions, except for per share data) (Unaudited)~~

Three Months Ended
March 31,
2021 2020
Statement of Operations Data:
Media revenues (a) $ 1,497 $ 1,574
Non-media revenues 14 35
Total revenues 1,511 1,609
Media programming and production expenses 1,023 828
Media selling, general and administrative expenses 213 210
Depreciation and amortization expenses (b) 153 174
Amortization of program contract costs 23 23
Non-media expenses 17 30
Corporate general and administrative expenses 61 49
Gain on asset dispositions and other, net of impairment (14) (32)
Operating income 35 327
Interest expense including amortization of debt discount and deferred financing costs (151) (180)
Gain on extinguishment of debt — 2
Income (loss) from equity method investments 9 (6)
Other income (expense), net 124 (4)
Income before income taxes 17 139
Income tax benefit 9 12
Net income $ 26 $ 151
Net income attributable to the redeemable noncontrolling interests (4) (20)
Net income attributable to the noncontrolling interests (34) (8)
Net (loss) income attributable to Sinclair Broadcast Group $ (12) $ 123
Basic and Diluted Earnings Per Common Share Attributable to Sinclair Broadcast Group:
Basic (loss) earnings per share $ (0.16) $ 1.36
Diluted (loss) earnings per share $ (0.16) $ 1.35

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As of March 31, 2021 As of December 31, 2020
Balance Sheet Data:
Cash and cash equivalents $ 941 $ 1,259
Total assets $ 13,132 $ 13,382
Total debt (c) $ 12,540 $ 12,551
Redeemable noncontrolling interests $ 188 $ 190
Total deficit $ (1,186) $ (1,185)

~~(a)Media revenues are defined as distribution revenue, advertising revenue, and other media revenues.~~

~~(b)Depreciation and amortization expenses include depreciation of property and equipment and amortization of definite-lived intangible and other assets.~~

~~(c)Total debt is defined as current and long-term notes payable, finance leases, and commercial bank financing, including finance leases of affiliates.~~

The following Management’s Discussion and Analysis provides qualitative and quantitative information about our financial performance and condition and should be read in conjunction with our consolidated financial statements and the accompanying notes to those statements. This discussion consists of the following sections:

Summary of Significant Events — financial events during the three months ended March 31, ~~2021~~2022 and through the date this Report on Form 10-Q is filed.

Results of Operations — an analysis of our revenues and expenses for the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021.

Liquidity and Capital Resources — a discussion of our primary sources of liquidity and an analysis of our cash flows from or used in operating activities, investing activities, and financing activities during the three months ended March 31, ~~2021.~~2022.

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Summary of Significant Events ~~and Financial Highlights~~

Transactions

•~~In February 2021, we sold~~On March 1, 2022, SBG's subsidiary Diamond Sports Intermediate Holdings, LLC, and certain direct and indirect subsidiaries, completed a series of transactions which are expected to provide DSIH with approximately $1 billion of liquidity enhancement over the next five years. As part of the Transaction, the governance structure of DSIH was modified. As a result, DSIH, whose operations were the entirety of our ~~stations WDKA in Paducah, KY~~local sports segment, was deconsolidated from the Company’s consolidated financial statements effective as of March 1, 2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and ~~KBSI in Cape Girardeau, MO for $28 million.~~Summary of Significant Accounting Policies within the Consolidated Financial Statements.

•In ~~February 2021,~~March 2022, Tejas Networks, part of the Tata Group, signed a definitive agreement to acquire approximately 65% of the shares of Saankhya Labs Private Ltd. Bangalore ("Saankhya"), in cash with the approximately 35% balance to be acquired subsequently through a merger process. ONE Media 3.0, LLC, a wholly-owned subsidiary of the Company, owns a 49% interest in Saankhya and will sell the majority of its interest, while retaining a minority interest in Tejas. The acquisition of 65% of Saankhya shares is expected to close within the next 90 days, after which the proceedings for merger with Tejas will be initiated, subject to customary approvals in India.

•In March 2022, we ~~acquired~~agreed to defer a portion of our management fees from DSG for the ~~remaining 73% interest we did not already own in ZypMedia, a leading demand-side platform specializing in executing local media campaigns for media companies~~next several years, as part of the Transaction.

•In May 2022, the Company sold certain assets of Ring of Honor Entertainment, including the wrestling promotion’s extensive video library dating back to 2002, brand assets, intellectual property, production equipment, and ~~agencies in the United States.~~more, to an affiliate of AEW.

Television and Digital Content

•In January ~~2021, we launched~~2022, two new programs produced in coordination with Stadium, our ~~headline news service The National Desk across our CW~~24/7 multi-platform sports network, premiered on Bally Sports’ 19 regional sports network brands and ~~MNT affiliates~~the Bally Sports app. “The Rally” is a discussion-based show presenting a young and ~~several FOX affiliates, as well as on all station websites~~diverse talent lineup, authentically debating and ~~STIRR. The service highlights~~analyzing the ~~latest and most pressing news~~trending sports topics of the day ~~in real time for viewers across~~while harnessing the ~~country.~~social media conversation and viewer commentary. The Bally RSN brands’ first sports betting program “Live on the Line, Powered by BetMGM” is a partnership with BetMGM, a leading sports betting and iGaming operator. The program highlights national sports betting storylines with a regional appeal, by providing expert picks while looking ahead to the day’s matchups.

•In ~~April 2021, we announced that for~~January 2022, Tennis Channel reached a multiyear agreement with the ~~third year~~Women’s Tennis Association ("WTA") to telecast year-round WTA matches in ~~a row, a Sinclair station was~~Germany, Austria, Switzerland, and the winner of a prestigious Investigative Reporters & Editors award for its investigative reporting. Our Portland, ME station, WGME (CBS), received the 2020 award for its excellent investigative coverage of a flaw in the Veterans Crisis Line, which it identifiedNetherlands through Tennis Channel’s subscription service and ~~helped spur legislative action to correct it.~~digital free ad-supported streaming TV ("FAST") channels.

•In ~~April 2021,~~March 2022, The National Desk, the Company’s national news program providing real-time national and regional news from across its television stations, added a weekend edition.

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•In March 2022, we announced the launch of our ~~first station, WBFF in Baltimore, celebrated its 50th anniversary on~~new business development unit, Free State Strategic Services. Free State’s mission is to provide the ~~air.~~federal government, along with state and local agencies, a full suite of targeted digital marketing and advertising solutions to help government agencies communicate with the American public effectively and efficiently.

Distribution, Network and Teams

•In January ~~2021, we entered into a multi-year~~2022, DSG renewed its extended market and digital distribution rights agreement with ~~ViacomCBS across 13 CBS network affiliations reaching about 5%~~the NBA. Under the agreement, the Bally RSNs are permitted to offer streaming content, including live games, on an authenticated and DTC basis, to the local territories of 16 NBA teams. The agreement also includes expanded content and highlight rights as well as access to the ~~U.S. television households.~~distribution of classic games in our local markets. The agreement has a term of one year with three successive one-year renewal offers, subject to compliance with the agreement.

•In January ~~2021,~~2022, we entered into multi-year renewals of the NBC affiliations and Fox affiliations in a ~~multi-year agreement with Verizon~~total of 20 of our markets. Our partners to which we provide sales and other services to under joint sales agreements or master service agreements also renewed NBC affiliations in four markets and Fox affiliations in seven markets.

•In April 2022, we announced that we and Charter Communications, Inc. reached a comprehensive distribution agreement for ~~the~~ continued carriage ~~on Verizon’s FiOS platform~~ of our owned local broadcast ~~television~~ stations and Tennis Channel.

•
In February 2021, we entered into a multi-year media rights agreement with the Milwaukee Brewers, beginning with the 2021 MLB season, for Bally Sports Wisconsin to continue as the television home of the Brewers.

Environmental, Social, and Governance

•In ~~February 2021,~~January 2022, we ~~entered into a binding term sheet with the Miami Marlins~~began taking applications for ~~a multi-year media rights agreement, beginning with the 2021 MLB season, for Bally Sports Florida to continue as the television home of the Marlins.~~our 2022 Diversity Scholarship, which has awarded more than $100,000 in scholarships since 2016.

•In March ~~2021, we rebranded most~~2022, ONE Media held a three-part, virtual webinar series tackling the intricacies of ~~our regional sports networks under~~Advanced Emergency Information (AEI) powered by the ~~Bally Sports name, ushering~~NextGen Broadcast standard, including the ways in ~~a new era in the way people watch~~which AEI can strengthen relationships with local emergency managers and ~~interact with live sports.~~

•~~In March 2021, fuboTV Inc.~~public safety professionals, and ~~Marquee announced a carriage agreement~~how AEI can enable TV newsrooms to ~~bring Chicago Cubs game coverage to the fuboTV platform.~~better serve communities during threats.

•In April ~~2021,~~2022, the ~~new Bally Sports app~~Company nominated the renowned Dr. Ben Carson, an experienced board director, former United States Presidential primary candidate and former Secretary of the U.S. Department of Housing and Urban Development, for authenticated users was launched, allowing viewers the ability to watch the entire programming line-up of their local Bally RSN, 24 hours a day, including live games, with a significantly greater amount of functionality and features comparedelection to the ~~app~~Company's Board of Directors, as it ~~replaced.~~continues to seek to add diversity to its leadership.

•In April ~~2021, we signed~~2022, Project Baltimore, the special investigative reporting unit of WBFF/Fox 45 News, was honored by Investigative Reporters and Editors ("IRE") for its reporting on Baltimore’s failure in its public school system. This was the fourth consecutive year a ~~multi-year enterprise partnership agreement with Operative Media to enable us to consolidate all~~Sinclair newsroom has been so honored. In addition, KUTV in Salt Lake City was an IRE finalist for their investigation into the systematic failures within Utah’s probation and parole system. Over the last three years, our newsrooms have won a total of our sellable advertising assets across our platforms into a single ad sales system. The framework will enable us to offer our customers a simplified and optimized solution to buying from our extensive ad inventory across all of our platforms.over 1,000 journalism awards.

•In April ~~2021, we agreed~~2022, the Company launched "Sinclair Green: Battery Recycling," a promotional campaign which ran throughout the month, in conjunction with Earth Month, encouraging its employees and viewers to ~~an over-arching distribution deal with Samsung TV for much~~recycle household batteries at a Batteries Plus location or through their local municipality. In addition, the Company began a pilot program to reduce the amount of ~~our content~~batteries it uses and to be accessible to Samsung TV viewers via apps. Our content to be included includes free streaming platform STIRR, premium networks Tennis Channel (via TVE for authenticated subscribers) and Tennis Channel Plus (SVOD), as well as networks Comet TV and Charge!. Additional networks are expected to be available in the future, including Bally Sports (via TVE for authenticated subscribers) and NewsOn.recycle its battery waste.

•In April ~~2021, we entered into~~2022, the Company raised over $215,000, including a ~~multi-year retransmission renewal~~$50,000 donation from Sinclair, through "Sinclair Cares: Ukraine Relief," a fundraising partnership with ~~Cox for~~Global Red Cross to help with their humanitarian relief efforts in Ukraine and neighboring countries.

•In April 2022, the ~~carriage~~Company's television stations were honored with a total of six National Headliner Awards, including top honors in the Public Service and Health/Science categories.

•To date in 2022, our ~~stations, Tennis Channel and our national networks on its platforms and extended carriage~~newsrooms have won a total of ~~the Bally RSNs and YES Network.~~60 journalism awards.

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NEXTGEN TV

• In January 2022, the NextGen Video Information Systems Alliance ("NVISA") published new consumer-facing research, sponsored by our subsidiary, ONE Media 3.0, that offered the first insight into which features American consumers want most in a NextGen Broadcast-enabled emergency information service. These include a desire for geo-targeted alerts, the ability to screen for only selected alerts, options for updated alerts, and importantly, a robust/dependable system that does not crash when the Internet or cell system goes down. All of these features are embedded in the NextGen Broadcast service.

• In January 2022, MPEG LA, a pioneer in the formation and management of patent pools, completed the formation of the ATSC 3.0 Patent Pool, dramatically simplifying the efficient licensing of the new ATSC 3.0 broadcast technology in multiple-receive devices, easing the distribution and deployment process. Included in the ATSC 3.0 Patent Pool are various patents owned by our subsidiary, ONE Media.

•In April ~~2021, CAST.ERA,~~2022, the Company and USSI Global announced a ~~media technology joint venture between Sinclair~~partnership to offer the nation’s first commercial datacasting service using the NextGen Broadcast standard ("ATSC 3.0"). The pilot program will deliver local content, advertising, and ~~SK Telecom, announced it will launch a next generation broadcast solution this year that boosts television content quality utilizing SK Telecom's 5G cloud and AI technology.~~data files to the rapidly growing Electric Vehicle Charging station market.

•~~To date in 2021,~~In 2022, we, in coordination with other broadcasters, and led by our joint venture, BitPath, have deployed NEXTGEN TV, powered by ATSC 3.0, in the ~~four~~seven additional markets below. This brings the total number of our markets in which NEXTGEN TV has been deployed to ~~fifteen:~~29:

Month

Market

Number of Stations

Company Stations

January ~~2021~~2022

~~Columbus, OH~~Green Bay, WI

~~WSYX (ABC/FOX)~~WLUK-TV (FOX), ~~WWHO (a)~~WCWF (CW)~~, WTTE (b) (TBD)~~

March ~~2021~~2022

~~Buffalo,~~West Palm Beach, FL

WPEC (CBS), WWHB-CD (Azteca)

March 2022

Charleston, SC

WCIV (ABC)

March 2022

Flint, MI

WSMH (FOX), WEYI-TV(a) (NBC), WBSF(a) (CW)

March 2022

Albany, NY

~~WNYO (MNT)~~WRGB (CBS), ~~WUTV~~WCWN (CW)

April 2022

Richmond-Petersburg, VA

WRLH-TV (FOX)

~~March 2021~~April 2022

~~Syracuse, NY~~Omaha, NE

~~WSTM (NBC)~~KPTM (FOX), ~~WTVH (a) (CBS)~~KXVO(b) (TBD)

~~May 2021~~

~~Grand Rapids, MI~~

~~WWMT (CBS)~~

(a)The license and programming assets for these stations are currently owned by a third party. We provide certain non-programming related sales, operational, and administrative services to these stations pursuant to service agreements, such as JSAs and SSAs.

(b)The license asset for this station is currently owned by a third party. We provide programming, sales, operational, and administrative services to this station pursuant to certain service agreements, such as LMAs.

Financing, Capital Allocation, and Shareholder Returns

•For the three months ended March 31, 2022, we repurchased approximately 2 million shares of Class A Common Stock for $68 million. As of May 5, 2022, we repurchased an additional 1 million shares of Class A Common Stock for $26 million since March 31, 2022. The shares were repurchased under an SEC Rule 10b5-1 plan.

•In April ~~2021,~~2022, we amended the ~~STG~~ Bank Credit Agreement to raise ~~the STG~~ Term ~~Loan B-3~~B-4 Loans in ~~an aggregate principal~~the amount of ~~$740~~$750 million ~~the proceeds of which were used~~in order to refinance ~~a portion~~all outstanding Term B loans and to redeem STG’s outstanding 5.875% Senior Notes due 2026. The amendment also extended the maturity of ~~STG's term loan maturing in January 2024.~~$612.5 million of revolving commitments to April 21, 2027.

•In February ~~2021~~ and May ~~2021,~~2022, we declared a quarterly cash ~~dividends~~dividend of ~~$0.20~~$0.25 per ~~share.~~share, an increase of 25% over 2021 dividends.

Other Events

•In ~~January 2021,~~February 2022, we announced the ~~hiring~~promotion of ~~Jeffrey Lewis as our~~Rob Weisbord to Chief ~~Compliance~~Operating Officer ~~a newly-created position to supervise corporate compliance functions, including regulatory, code~~and President of ~~conduct, competition, and privacy.~~

•~~In January 2021, we jointly revealed, with Bally's, the new Bally Sports logo and Bally Sports regional monikers for our owned and operated Bally RSNs.~~

•~~In February 2021, we began taking applications for our 2021 Diversity Scholarship, which has awarded $160,000 in scholarships over the last five years.~~Broadcast.

•In March ~~2021, we announced an enterprise-wide workforce reduction involving the termination~~2022, our Executive Vice President and Chief Financial Officer, Lucy Rutishauser, was named one of ~~approximately 500 employees and incurred approximately $7 million of restructuring and related charges.~~

•"Maryland's Top 100 Women in 2022" by ~~In April 2021, we increased the size of our Board of Directors and named Laurie R. Beyer to serve as its newest independent board member.~~

•The Daily Record~~In April 2021, we announced that Bally Sports, Tennis Channel, and its High School Sports Division collectively, won nine Cynopsis Sports Media Awards, including "RSN of the Year."~~.

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RESULTS OF OPERATIONS

Any references to the second, third, or fourth quarters are to the three months ended June 30, September 30, or December 31, respectively, for the year being discussed. WeFor the quarter ended March 31, 2022, we have two reportable segments, "broadcast" and, prior to Deconsolidation, "local sports," that are disclosed separately from our other and corporate activities.

Seasonality / Cyclicality

The operating results of our broadcast segment are usually subject to cyclical fluctuations from political advertising. In even numbered years, political spending is usually significantly higher than in odd numbered years due to advertising expenditures preceding local and national elections. Additionally, every four years, political spending is usually elevated further due to advertising expenditures preceding the presidential election. Also, the second and fourth quarter operating results are usually higher than the first and third quarters’ because advertising expenditures are increased in anticipation of certain seasonal and holiday spending by consumers.

The operating results of our local sports segment are usually subject to cyclical fluctuations based on the timing and overlap of the ~~MLB,~~Major League Baseball ("MLB"), NBA, and NHL seasons. Usually, the second and third quarter operating results are higher than the first and fourth quarter operating results.

However, with the exception of political advertising, our usual seasonality and cyclicality, as described above, did not occur in 2020, and may not occur in 2021, for either segment due to the COVID-19 pandemic.

Operating Data

The following table sets forth our consolidated operating data for the periods presented (in millions):


		Three Months Ended March 31,				Three Months Ended March 31,
		2021		2020				2022		2021
Media revenues	Media revenues	$	1,497	$	1,574		Media revenues	$	1,275	$	1,497
Non-media revenues	Non-media revenues	14		35			Non-media revenues	13		14
Total revenues	Total revenues	1,511		1,609			Total revenues	1,288		1,511
Media programming and production expenses	Media programming and production expenses	1,023		828			Media programming and production expenses	758		1,023
Media selling, general and administrative expenses	Media selling, general and administrative expenses	213		210			Media selling, general and administrative expenses	220		213
Depreciation and amortization expenses	Depreciation and amortization expenses	153		174			Depreciation and amortization expenses	121		153
Amortization of program contract costs	Amortization of program contract costs	23		23			Amortization of program contract costs	25		23
Non-media expenses	Non-media expenses	17		30			Non-media expenses	13		17
Corporate general and administrative expenses	Corporate general and administrative expenses	61		49			Corporate general and administrative expenses	47		61

Gain on deconsolidation of subsidiary							Gain on deconsolidation of subsidiary	(3,357)		—
Gain on asset dispositions and other, net of impairment	Gain on asset dispositions and other, net of impairment	(14)		(32)			Gain on asset dispositions and other, net of impairment	(5)		(14)
Operating income	Operating income	$	35	$	327		Operating income	$	3,466	$	35
Net (loss) income attributable to Sinclair Broadcast Group		$	(12)	$	123
Net income (loss) attributable to Sinclair Broadcast Group							Net income (loss) attributable to Sinclair Broadcast Group	$	2,587	$	(12)

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The Impact of COVID-19 on our Results of Operations

Overview

On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and by the end of the following day, each of the MLB, NBA, and NHL had suspended their seasons. On March 13, 2020, the United States declared a national state of emergency. As of March 31, ~~2021~~2022, the national state of emergency is still in effect, however states have reopened their economies at various levels and various timing, COVID-19 vaccinations are being distributed in mass quantities and all professional sports leagues are currently playing live games. However, with new variants of COVID-19 being detected across multiple countries, it still remains unclear how the current trends of states reopening their economies will be impacted and what the overall impact of COVID-19 will be on our business.

~~Broadcast segment~~

During the first quarter of 2021, as compared to the prior year, we saw a decrease in advertising revenue primarily related to a decrease in political advertising revenue, as 2020 was a political year. We expect total advertising revenue for the second quarter ended June 30, 2021 to be higher than the same period in 2020 primarily due to the negative impact of the COVID-19 pandemic in the prior year. See ~~Revenue~~ ~~under the~~ ~~Broadcast Segment~~ ~~sectionbelow for further discussion.~~

~~Local sports segment~~

In March 2020, the NBA and NHL each postponed their ongoing 2019-2020 seasons and the MLB postponed the start of its 2020 season and returned to operation under reduced game counts and were able to complete these modified seasons during the early part of the fourth quarter of 2020. The NBA and NHL began their modified 2020-2021 seasons during the fourth quarter of 2020 and the first quarter of 2021, respectively, and the MLB began its 2021 season on April 1, 2021. Advertising revenue increased in the first quarter of 2021 as compared to the first quarter of 2020 largely driven by an increased number of NBA and NHL games played during the quarter. Distribution revenue decreased during the first quarter of 2021 compared to the first quarter of 2020 due to subscriber erosion experienced by certain Distributors and the effect of three Distributors dropping carriage of the RSNs during the third and fourth quarter of 2020. The NBA and NHL are nearing completion of their modified 2020-2021 seasons. The NBA and NHL have not announced their 2021-2022 season schedules yet and there can be no assurances that the MLB, NBA, or NHL will complete full or abbreviated seasons in the future. Any reduction in the actual number of games played by the leagues may have an adverse impact on our operations and the cash flows of our local sports segment. See ~~Distribution Revenue~~ in ~~Revenue Recognition~~ ~~and~~ ~~Sports Programming Rights~~ ~~under~~ ~~Note 1. Nature of Operations and Summary of Significant Accounting Policies~~ ~~within the~~ ~~Consolidated Financial Statements~~ for further discussion on how COVID-19 has impacted distribution revenue and sports rights expense, respectively, including the need for us to provide rebates to our Distributors as well as seek rebate from or reduce future payments to certain of the sports teams.

Business continuity

Within the United States, our business has been designated an essential business, which allows us to continue to serve our customers, however, the COVID-19 pandemic has disrupted our operations. Certain of our facilities have experienced temporary disruptions as a result of the COVID-19 pandemic, and we cannot predict whether our facilities will experience more significant disruptions in the future and how long these disruptions will last. The COVID-19 pandemic has heightened the risk that a significant portion of our workforce will suffer illness or otherwise be unable to work. The COVID-19 pandemic has also resulted in some workers leaving the workforce which has caused wage inflation and made it more difficult for us to find qualified employees. Furthermore, additional reductions in our workforce may become necessary as a result of declines in our business caused by the COVID-19 pandemic. If we take such actions, we cannot assure that we will be able to rehire our workforce once our business has recovered.

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BROADCAST SEGMENT

The following table sets forth our revenue and expenses for our broadcast segment ~~previously known as our local news and marketing services segment,~~ for the periods presented (in millions):


		Three Months Ended March 31,				Percent Change Increase / (Decrease)	Three Months Ended March 31,						Percent Change Increase / (Decrease)
		2021		2020				2022				2021			Percent Change Increase / (Decrease)
Revenue:	Revenue:								Revenue:
Distribution revenue	Distribution revenue	$	361	$	355	2%			Distribution revenue	$	392		$	361			9%
Advertising revenue	Advertising revenue	267		310		(14)%			Advertising revenue	282			267			6%
Other media revenues (a)	Other media revenues (a)	37		36		3%			Other media revenues (a)	47			37			27%
Media revenues	Media revenues	$	665	$	701	(5)%			Media revenues	$	721		$	665		8%

Operating Expenses:	Operating Expenses:								Operating Expenses:
Media programming and production expenses	Media programming and production expenses	$	337	$	316	7%			Media programming and production expenses	$	350		$	337		4%
Media selling, general and administrative expenses(b)	Media selling, general and administrative expenses(b)	141		140		1%			Media selling, general and administrative expenses(b)	156			141			11%
Depreciation and amortization expenses	Depreciation and amortization expenses	62		58		7%			Depreciation and amortization expenses	60			62			(3)%
Amortization of program contract costs	Amortization of program contract costs	21		23		(9)%			Amortization of program contract costs	20			21			(5)%
Corporate general and administrative expenses	Corporate general and administrative expenses	55		44		25%			Corporate general and administrative expenses	43			55			(22)%
Gain on asset dispositions and other, net of impairment	Gain on asset dispositions and other, net of impairment	(14)		(32)		(56)%			Gain on asset dispositions and other, net of impairment	(5)			(14)			(64)%
Operating income	Operating income	$	63	$	152	(59)%			Operating income	$	97		$	63		54%

(a)Includes ~~$27~~$24 million and ~~$24~~$27 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, of intercompany revenue related to certain services provided to other and local sports, ~~and other~~prior to the Deconsolidation, under management services agreements, which is eliminated in consolidation, and $5 million of revenue for the three months ended March 31, 2022 for services provided by broadcast under management services agreements after the Deconsolidation, which is not eliminated in consolidation.

(b)Includes $16 million for the three months ended March 31, 2022 of intercompany expense related to certain services.

Revenue

Distribution revenue. Distribution revenue, which includes payments from Distributors for our broadcast signals, increased $6$31 million for the three months ended March 31, ~~2021,~~2022, when compared to the same period in ~~2020,~~2021, primarily due to an increase in contractual rates, partially offset by a decrease in subscribers.

Advertising revenue. Advertising revenue ~~decreased $43~~increased $15 million for the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020. The decrease is~~2021, primarily ~~related~~due to ~~a decrease~~an increase in political advertising revenue of ~~$36~~$13 million, as ~~2020 was~~2022 is a political year, ~~and~~compared to 2021 which was a decrease in certain other categories, notably a $3 million decrease in each of the automotive, furniture, and restaurants categories, respectively, a $2 million decrease in each of the drugs and cosmetics and retail categories, respectively, and a $1 million decrease in media primarily as a result of the impact of the COVID-19 pandemic, as well as the Super Bowl moving from being broadcast on FOX in the prior year to CBS in the currentnon-political year. ~~The decrease is partially offset by an increase in certain categories, notably a $5 million increase in both the services and entertainment categories, respectively.~~

The following table sets forth our primary types of programming and their approximate percentages of advertising revenue, excluding digital revenue, for the periods presented:


		Percent of Advertising Revenue (Excluding Digital) for the		Percent of Advertising Revenue (Excluding Digital) for the
		Three Months Ended March 31,			Three Months Ended March 31,
		2021	2020				2022	2021
Local news	Local news	32%	33%			Local news	34%	32%
Syndicated/Other programming	Syndicated/Other programming	28%	28%			Syndicated/Other programming	26%	28%
Network programming	Network programming	23%	25%			Network programming	21%	23%
Sports programming	Sports programming	12%	10%			Sports programming	15%	12%
Paid programming	Paid programming	5%	4%			Paid programming	4%	5%

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The following table sets forth our affiliate percentages of advertising revenue for the periods presented:


			Percent of Advertising Revenue for the		Percent of Advertising Revenue for the
			Three Months Ended March 31,				Three Months Ended March 31,
		# of Channels	2021	2020			# of Channels	2022	2021
ABC	ABC	40	29%	29%		ABC	40	30%	29%
FOX	FOX	56	25%	28%		FOX	56	23%	25%
CBS	CBS	31	22%	19%		CBS	31	21%	22%
NBC	NBC	25	13%	13%		NBC	25	16%	13%
CW	CW	47	6%	6%		CW	46	5%	6%
MNT	MNT	37	4%	4%		MNT	40	4%	4%
Other (a)	Other (a)	392	1%	1%		Other (a)	396	1%	1%
Total	Total	628				Total	634

(a)We broadcast other programming from the following providers on our channels including: Antenna TV, Azteca, Bounce, ~~Network,~~ CHARGE!, Comet, Dabl, Decades, Estrella TV, Get TV, Grit, Me TV, ~~Movies!,~~Rewind, Stadium, TBD, Telemundo, This TV, UniMas, Univision, and Weather.

Other Media Revenue. Other media revenue increased $10 million for the three months ended March 31, 2022, when compared to the same period in 2021, primarily due to $6 million related to revenue recognized under the Bally commercial agreement that we began performing on in the second quarter of 2021 and a $2 million increase in intercompany revenue from the local sports segment and other related to providing certain services under a management services agreement prior to the Deconsolidation, which are eliminated in our consolidated results.

Expenses

Media programming and production expenses. Media programming and production expenses increased ~~$21~~$13 million for the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020. The increase is~~2021, primarily related to ~~a $28 million~~an increase in fees pursuant to network affiliation ~~agreements, partially offset by a $4 million decrease in promotional costs and a $3 million decrease in employee compensation cost and travel expenses.~~agreements.

Media selling, general and administrative expenses. Media selling, general and administrative expenses increased $1$15 million for the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020. The increase is~~2021, primarily due to an $8 million in employee compensation cost, a portion of which is related to severance and other termination benefits related to the reduction-in-force completed in the first quarter, partially offset by a $7 million decreaseincrease in third-party fulfillment costs from our digital ~~business.~~business and a $6 million increase in information technology costs.

Depreciation and amortization expenses. Depreciation and amortization expenses ~~increased $4~~decreased $2 million for the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020, and is~~2021, primarily ~~due~~related to ~~an increase in~~ assets ~~placed in-service.~~retired during 2021.

Amortization of program contract costs. The amortization of program contract costs decreased $2$1 million for the three months ended March 31, ~~2021~~2022, when compared to the same ~~periods~~period in ~~2020, and is~~2021, primarily related to ~~the timing of amortization on long-term contracts and~~ reduced renewal costs.

Corporate general and administrative expenses. See explanation under Corporate and Unallocated Expenses.

Gain on asset dispositions and other, net of impairments. For the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 we recorded gains of ~~$14~~$1 million and ~~$24~~$14 million, respectively, related to reimbursements from the spectrum repack. ~~During~~See Note 2. Acquisitions and Dispositions of Assets within the ~~first quarter~~Consolidated Financial Statements for further discussion. For the three months ended March 31, 2022, we recorded a gain on asset disposition of $3 million related to the sale of assets of one our stations. For the three months ended March 31, 2021, we recorded a gain on asset disposition of $12 million related to the ~~WDKA-TV/~~sale of WDKA-TV and KBSI-TV ~~transaction~~ and a loss of $12 million related to the write-down of the carrying value of assets of one of our stations to approximate the estimated selling price to be received in a potential sales transaction. ~~During the first quarter of 2020 we recorded a gain on asset disposition and other, net of impairments of $8 million related to the KGBT-TV transaction. See~~ ~~Note 2. Acquisitions and Dispositions of Assets~~ ~~within our~~ ~~Consolidated Financial Statements~~ ~~for further discussion.~~

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LOCAL SPORTS SEGMENT

Our local ~~sports segment, previously known as our~~ sports segment reflects the results of our Bally RSNs, Marquee, and a minority interest in the YES ~~Network.~~Network prior to the Deconsolidation on March 1, 2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within the Consolidated Financial Statements. The Bally RSNs, Marquee and YES Network own the exclusive rights to air, among other sporting events, the games of professional sports teams in designated local viewing areas.

The following table sets forth our revenue and expenses for our local sports segment for the ~~period~~periods presented (in millions):


		Three Months Ended March 31,				Percent Change Increase / (Decrease)	Three Months Ended March 31,						Percent Change Increase / (Decrease)
		2021		2020				2022				2021			Percent Change Increase / (Decrease)
Revenue:	Revenue:					(b)			Revenue:
Distribution revenue	Distribution revenue	$	698	$	752	(7)%			Distribution revenue	$	433		$	698			(38)%
Advertising revenue	Advertising revenue	65		55		18%			Advertising revenue	44			65			(32)%
Other media revenue	Other media revenue	5		5		—%			Other media revenue	5			5			—%
Media revenue	Media revenue	$	768	$	812	(5)%			Media revenue	$	482		$	768		(37)%

Operating Expenses:	Operating Expenses:								Operating Expenses:
Media programming and production expenses	Media programming and production expenses	$	657	$	478	37%			Media programming and production expenses	$	376		$	657		(43)%

Media selling, general and administrative expenses (a)	Media selling, general and administrative expenses (a)	65		57		14%			Media selling, general and administrative expenses (a)	55			65			(15)%

Depreciation and amortization expenses	Depreciation and amortization expenses	84		110		(24)%			Depreciation and amortization expenses	54			84			(36)%
Corporate general and administrative	Corporate general and administrative	3		2		50%			Corporate general and administrative	1			3			(67)%

Operating (loss) income (a)		$	(41)	$	165	(125)%
Operating loss (a)									Operating loss (a)	$	(4)		$	(41)		(90)%
Income from equity method investments	Income from equity method investments	$	13	$	6	117%			Income from equity method investments	$	10		$	13		(23)%

(a)Includes ~~$26~~$24 million and ~~$23~~$26 million for the three months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively,of intercompany expense related to certain services provided by the broadcast segment under a management services agreement, which is eliminated in consolidation.

~~(b)~~

~~Marquee was launched in late February 2020, therefore although not called out in each section below, is a driver of the changes between the periods due to a full quarter of activity being included~~The decrease in the ~~current period, versus only a partial quarter of activity in the prior period.~~

~~Distribution revenue.~~ ~~Distribution~~revenue ~~which is generated through fees received from Distributors~~and expense items noted below for the ~~right to distribute our RSNs, decreased $54 million for the three months ended March 31, 2021~~current period when compared to the same period in ~~2020,~~the prior year was primarily due to the ~~loss~~Deconsolidation, as our current period results include only two months of three Distributors in 2020 and elevated subscriber churn with remaining Distributors offset by a $19 million reduction to accrued rebates to Distributors primarily related to an increase in estimated games relatedactivity due to the ~~2020-2021 NBA season.~~Deconsolidation, versus a full period of activity in the prior year, therefore the periods are not comparable. See ~~discussion~~Deconsolidation of Diamond Sports Intermediate Holdings LLC under ~~Revenue Recognition~~ ~~within~~ FNNote 1. Nature of Operations and Summary of Significant Accounting Policies within the Consolidated Financial Statements for further discussion.

Media revenue. ~~We expect distribution~~Media revenue ~~to decrease~~was $482 million and $768 million for the three months ended ~~June 30, 2021 as compared to the~~ ~~three months ended~~ March 31, 2022 and 2021, respectively, and is primarily ~~due~~derived from distribution and advertising revenue. Distribution revenue is generated through fees received from Distributors for the right to ~~elevated levels of subscriber churn.~~

~~Advertising revenue.~~ ~~Advertising~~distribute our RSNs and advertising revenue is primarily generated from sales of commercial time within the RSNs programming. Advertising revenue increased $10 million for the three months ended March 31, 2021 when compared to the same period in 2020, primarily due to a higher number of games being played in the first quarter of 2021 when compared to the first quarter of 2020 due to suspension of the league seasons in March of 2020. We expect advertising revenue for the three months ended June 30, 2021 to ~~increase as compared to the three months ended March 31, 2021, primarily due to a higher number of games played in the second quarter.~~ ~~See discussion under~~ ~~The Impact of COVID-19 on our Results of Operations~~ ~~for further discussion.~~

~~Table of Contents~~

Media programming and production expenses. Media programming and production expenses are primarily related to amortization of our sports programming rights with MLB, NBA, and NHL teams, and the costs of producing and distributing content for our brands including live games, pre-game and post-game shows, and backdrop programming. Media programming and production expenses ~~increased $179~~were $376 million and $657 million for the three months ended March 31, 2022 and 2021, when compared to the same period in 2020, primarily driven by an increase in sports rights amortization expense of $161 million and production expenses of $18 million. These increases are primarily driven by the suspension of the 2019-2020 NBA and NHL seasons in early March 2020 and the compression of the 2020-2021 NBA and NHL seasons. The changes to the seasons were in response to the COVID-19 pandemic and resulted in a higher number of games during the first quarter of 2021 as compared to the same prior year period. The increase in sports rights amortization was moderated by reductions in rights fees resulting from the decisions made by the NBA and NHL to reduce the overall number of games to be played in the 2020-2021 season. We expect media programming and production expenses for the three months ended June 30, 2021 t~~o increase as compared to the three months ended March 31, 2021, primarily due to the start of the MLB season.~~ ~~See discussion under~~ ~~The Impact of COVID-19 on our Results of Operations~~ ~~for further discussion.~~respectively.

Media selling, general, and administrative expenses. Media selling, general, and administrative expenses ~~increased $8~~were $55 million and $65 million for the three months ended March 31, 2022 and 2021, ~~when compared to the same period in 2020,~~respectively, and are primarily related to ~~a $3 million increase of~~ management ~~services~~service agreement fees, ~~a $2 million increase in information technology~~employee compensation, advertising expenses, and ~~a $1 million increase in employee compensation cost.~~consulting fees.

Depreciation and amortization expenses. Depreciation and amortization expenses ~~decreased $26~~were $54 million and $84 million for the three months ended March 31, 2022 and 2021, ~~when compared~~respectively, and are primarily related to the ~~same period in 2020, primarily due to a decrease in amortization expense due to lower intangible asset values as a result~~depreciation of ~~the impairment we recognized in 2020.~~definite-lived assets and other assets.

Corporate general and administrative expenses. See explanation under Corporate and Unallocated Expenses.

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Income from equity method investments. ~~Income from equity method investments for~~For the three months ended March 31, 2022 and 2021 ~~and 2020~~income from equity method investments was ~~$13~~$10 million and $6$13 million, respectively, and is primarily related to our investment in the YES Network.

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OTHER

The following table sets forth our revenues and expenses for our owned networks and content, non-broadcast digital and internet solutions, technical services, and non-media investments (collectively, other) for the periods presented (in millions):


		Three Months Ended March 31,				Percent Change Increase / (Decrease)	Three Months Ended March 31,						Percent Change Increase / (Decrease)
		2021		2020				2022				2021			Percent Change Increase / (Decrease)
Revenue:	Revenue:								Revenue:
Distribution revenue	Distribution revenue	$	50	$	49	2%			Distribution revenue	$	48		$	50			(4)%
Advertising revenue	Advertising revenue	40		35		14%			Advertising revenue	68			40			70%
Other media revenues	Other media revenues	2		1		100%			Other media revenues	4			2			100%
Media revenues(a)	Media revenues(a)	$	92	$	85	8%			Media revenues(a)	$	120		$	92		30%
Non-media revenues ~~(a)~~(b)	Non-media revenues ~~(a)~~(b)	$	16	$	43	(63)%			Non-media revenues ~~(a)~~(b)	$	14		$	16		(13)%

Operating Expenses:	Operating Expenses:								Operating Expenses:
Media expenses (c)	Media expenses (c)	$	64	$	70	(9)%			Media expenses (c)	$	89		$	64		39%
Non-media expenses ~~(b)~~(d)	Non-media expenses ~~(b)~~(d)	$	18	$	30	(40)%			Non-media expenses ~~(b)~~(d)	$	14		$	18		(22)%

Operating income	Operating income	$	16	$	22	(27)%			Operating income	$	18		$	16		13%
Loss from equity method investments		$	(4)	$	(12)	(67)%
Income (loss) from equity method investments									Income (loss) from equity method investments	$	2		$	(4)		(150)%

(a)~~Non-media~~Media revenues for the three months ended March 31, ~~2021 and 2020includes $2~~2022 include $21 million ~~and $8 million, respectively,~~ of intercompany revenues related to certain services and sales provided to the broadcast segment and $1 million of intercompany revenues related to certain services and sales provided to the local sports segment, which are eliminated in consolidation.

(b)Non-media ~~expenses~~revenues for the three months ended March 31, 2022 and 2021include $1 million and $2 million, respectively, of intercompany ~~expenses~~revenues related to certain services and sales provided to the broadcast segment, which are eliminated in consolidation.

(c)Media expenses for the three months ended March 31, 2022 and 2021 include $5 million and ~~2020~~ $2 million, respectively, of intercompany expenses primarily related to certain services provided by the broadcast segment, which are eliminated in consolidation.

(d)Non-media expenses for the three months ended March 31, 2022 and 2021include $2$1 million and $1 million, respectively, of intercompany expenses ~~primarily~~ related to certain services and sales provided to the broadcast segment, which are eliminated in consolidation.

Revenue. Media revenue increased $7$28 million for the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020,~~2021, primarily due to an increase in advertising revenue related to our digital initiatives and owned ~~networks and digital initiatives.~~networks. Non-media revenue decreased ~~$27~~$2 million for the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020,~~2021, primarily due to ~~a decrease~~the sale of Triangle Sign & Service, LLC (Triangle) in ~~broadcast equipment sales due to~~ the ~~expected winding down~~second quarter of ~~the FCC's National Broadband Plan repack process.~~2021.

Expenses. Media expenses ~~decreased $6~~increased $25 million for the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020,~~2021, primarily ~~due~~related to ~~decreased programming and operating costs of~~ our ~~owned networks.~~digital initiatives. Non-media expenses decreased ~~$12~~$4 million for the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020,~~2021, primarily due to ~~a decrease~~the sale of Triangle in the ~~costs~~second quarter of ~~goods associated with our lower broadcast equipment sales.~~2021.

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CORPORATE AND UNALLOCATED EXPENSES

The following table presents our corporate and unallocated expenses for the periods presented (in millions):


		Three Months Ended March 31,				Percent Change Increase/ (Decrease)	Three Months Ended March 31,						Percent Change Increase/ (Decrease)
		2021		2020				2022				2021			Percent Change Increase/ (Decrease)
Corporate general and administrative expenses	Corporate general and administrative expenses	$	61	$	49	24%			Corporate general and administrative expenses	$	47		$	61		(23)%
Gain on deconsolidation of subsidiary									Gain on deconsolidation of subsidiary	$	(3,357)		$	—		n/m
Interest expense including amortization of debt discount and deferred financing costs	Interest expense including amortization of debt discount and deferred financing costs	$	151	$	180	(16)%			Interest expense including amortization of debt discount and deferred financing costs	$	115		$	151		(24)%
Other income (expense), net		$	124	$	(4)	n/m
Income tax benefit		$	9	$	12	(25)%
Other (expense) income, net									Other (expense) income, net	$	(60)		$	124		(148)%
Income tax (provision) benefit									Income tax (provision) benefit	$	(687)		$	9		(7733)%

Net income attributable to the redeemable noncontrolling interests	Net income attributable to the redeemable noncontrolling interests	$	(4)	$	(20)	(80)%			Net income attributable to the redeemable noncontrolling interests	$	(4)		$	(4)		—%
Net income attributable to the noncontrolling interests	Net income attributable to the noncontrolling interests	$	(34)	$	(8)	n/m			Net income attributable to the noncontrolling interests	$	(25)		$	(34)		(26)%

n/m —- not meaningful

Corporate general and administrative expenses. The table above and the explanation that follows cover total consolidated corporate general and administrative expenses. Corporate general and administrative expenses ~~increased~~decreased in total by ~~$12~~$14 million for the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020,~~2021, primarily due to ~~a $20~~an $11 million ~~increase~~decrease in employee compensation cost ~~a portion of which is related to severance and other termination benefits~~ related to the reduction-in-force ~~completed~~severance and termination benefits that occurred in the first quarter ~~partially offset by~~of 2021 and due to a $6$4 million decrease in legal, consulting, and regulatory costs, primarily related to the litigation discussed under Note 6. Commitments and Contingencies within the Consolidated Financial Statements~~and the acquisition of the Bally RSNs.~~.

We expect corporate general and administrative expenses to decrease in the second quarter of ~~2021.~~2022 when compared to the first quarter of 2022.

Gain on deconsolidation of subsidiary. During the first quarter of 2022 we recorded a gain of $3,357 million related to the Deconsolidation, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within the Consolidated Financial Statements.

Interest expense including amortization of debt discount and deferred financing costs. The table above and explanation that follows cover total consolidated interest expense. Interest expense decreased by ~~$29~~$36 million for the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020,~~2021, primarily due to a ~~$19 million~~ decrease in DSG interest expense ~~related to decreases in LIBOR and refinancing of existing indebtedness and a $12 million decrease in STG interest expense~~ due to ~~decreases~~the Deconsolidation, as discussed in ~~LIBOR~~Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and ~~refinancing~~Summary of ~~existing indebtedness, partially offset by a $3 million increase related to~~Significant Accounting Policies within the ~~A/R Facility.~~Consolidated Financial Statements.

We expect interest expense to ~~increase in amount~~decrease in the second quarter of ~~2021.~~2022 when compared to the first quarter of 2022.

Other (expense) income, net. Other (expense) income, net ~~increased~~decreased by ~~$128~~$184 million for the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020,~~2021, primarily due to a $78 million decrease in the fair value of certain investments recorded at fair value in the first quarter of 2022 compared to a $122 million increase in the fair value of certain investments recorded at fair ~~value.~~value in the first quarter of 2021. See Note 3. Other Assets within the Consolidated Financial Statements for further information.

Income tax (provision) benefit.The effective tax rate for the three months ended March 31, ~~2021~~2022 was a ~~benefit~~provision of ~~53.8%~~20.8% as compared to a benefit of ~~8.3%~~53.8% during the same period in ~~2020.~~2021. The ~~increase~~decrease in the ~~benefit~~effective tax rate for the three months ended March 31, ~~2021,~~2022, as compared to the same period in ~~2020,~~2021, is primarily due to substantially ~~magnified~~greater impact of 2021 discrete items as a result of ~~small 2021~~low pre-tax income ~~partially offset by a greater benefit~~ in ~~2020 of federal tax credits related to investments in sustainability initiatives.~~2021.

Net income attributable to the redeemable noncontrolling interests. Net income attributable to the redeemable noncontrolling interests ~~decreased $16 million~~remained flat during the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020, primarily due to redemptions of a portion of the outstanding preferred equity subsequent to March 31, 2020.~~2021.

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Net income attributable to the noncontrolling interests. Net income attributable to the noncontrolling interests ~~increased $26~~decreased $9 million during the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020,~~2021, primarily as a result of the ~~launch~~Deconsolidation, as discussed in Deconsolidation of ~~Marquee at~~Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within the ~~end of February 2020.~~Consolidated Financial Statements.

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LIQUIDITY AND CAPITAL RESOURCES

As of March 31, ~~2021,~~2022, we had net working capital of approximately ~~$2,048~~$864 million, including ~~$941~~$521 million in cash and cash equivalent balances. Cash on hand, cash generated by our operations, and borrowing capacity under the Bank Credit ~~Agreements~~Agreement are used as our primary sources of liquidity.

The Bank Credit ~~Agreements each include~~Agreement includes a financial maintenance covenant, the first lien leverage ratio (as defined in the ~~respective~~ Bank Credit Agreement), which requires such ~~applicable~~ ratio not to exceed 4.5x, ~~and 6.25x,~~ measured as of the end of each fiscal ~~quarter, for~~quarter. As of March 31, 2022, the STG ~~and DSG, respectively. The respective~~first lien leverage ratio was below 4.5x. Under the Bank Credit Agreement, a financial maintenance covenant is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the ~~respective~~ revolving credit facility, measured as of the last day of each fiscal quarter, is utilized under ~~such~~the revolving credit facility as of such date. Since there was no utilization under ~~either of~~ the revolving credit ~~facilities~~facility as of March 31, ~~2021, neither~~2022, STG ~~nor DSG~~ was subject to the respective financial maintenance covenant under their applicable Bank Credit Agreement. As of March 31, 2021, the STG first lien leverage ratio was below 4.5x and the DSG first lien leverage ratio exceeded 6.25x. We expect that the DSG first lien leverage ratio will remain above 6.25x for at least the next 12 months, which will restrict our ability to fully utilize the DSG revolving credit facility. We do not currently expect to have more than 35% of the capacity of the DSG revolving credit facility outstanding as of any quarterly measurement date during the next twelve months, therefore we do not expect DSG will be subject to the financial maintenance ~~covenant.~~covenant under the Bank Credit Agreement. The Bank Credit ~~Agreements contain~~Agreement contains other restrictions and covenants with which ~~the respective entities were~~STG was in compliance as of March 31, ~~2021.~~2022.

~~On April~~As of March 1, ~~2021, STG amended~~2022, we no longer consolidate the ~~STG Bank Credit Agreement to raise~~debt of DSIH. See Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within the STG Term Loan B-3 in an aggregate principal amount of $740 million, the proceeds of which were used to refinance a portion of STG's term loan maturing in January 2024. The STG Term Loan B-3 matures in April 2028 and bears interest at LIBOR (or successor rate) plus 3.00%.

Consolidated Financial Statements.

The A/R Facility enables DSG to raise incremental funding for the ongoing business needs of the local sports segment. The maximum funding availability under the A/R Facility is the lesser of $250 million and the sum of the lowest aggregate loan balance since November 1, 2020 plus $50 million. The amount of actual availability under the A/R Facility is subject to change based on the level of eligible receivables sold by certain indirect wholly owned subsidiaries of DSG identified therein (Originators) to DSPV and certain reserves. Eligibility of the receivables is determined by a variety of factors, including, but not limited to, credit ratings of the Originators’ customers, customer concentration levels, and certain characteristics of the accounts receivable being transferred. As of March 31, ~~2021,~~2022, our total debt, defined as current and long-term notes payable, finance leases, and commercial bank financing, including finance leases of affiliates, was $4,398 million, including current debt, due within the ~~total commitment was $216 million and the balance~~next 12 months, of $36 million.

Other than as a result of the ~~loans under the A/R Facility was $173 million.~~

~~During the three months ended March 31, 2021,~~Deconsolidation, there were no ~~redemptions of preferred equity. The balance of the Redeemable Subsidiary Preferred Equity~~other material changes to our contractual cash obligations as of March 31, ~~2021 was $170 million, net of issuance costs.~~2022.

We anticipate that existing cash and cash equivalents, cash flow from our operations, and borrowing capacity under the Bank Credit ~~Agreements and A/R Facility~~Agreement will be sufficient to satisfy our debt service obligations, capital expenditure requirements, and working capital needs for the next 12twelve months. However, certain factors, including but not limited to, the severity and duration of the COVID-19 pandemic and the war in Ukraine and resulting effect on the economy, our advertisers, Distributors, and their subscribers, could affect our liquidity and our first lien leverage ratio which could affect our ability to access the full borrowing capacity under the Bank Credit ~~Agreements.~~Agreement. For our long-term liquidity needs, in addition to the sources described above, we may rely upon various sources, such as but not limited to, the issuance of long-term debt, the issuance of equity or other instruments convertible into or exchangeable for equity, or the sale of Company assets. However, there can be no assurance that additional financing or capital or buyers of our Company assets will be available, or that the terms of any transactions will be acceptable or advantageous to us.

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Sources and Uses of Cash

The following table sets forth our cash flows for the periods presented (in millions):


		Three Months Ended March 31,				Three Months Ended March 31,
		2021		2020				2022		2021
Net cash flows used in operating activities		$	(206)	$	(39)
Net cash flows from (used in) operating activities							Net cash flows from (used in) operating activities	$	70	$	(206)

Cash flows used in investing activities:	Cash flows used in investing activities:						Cash flows used in investing activities:
Acquisition of property and equipment	Acquisition of property and equipment	$	(20)	$	(46)		Acquisition of property and equipment	$	(21)	$	(20)

Proceeds from the sale of assets	Proceeds from the sale of assets	28		18			Proceeds from the sale of assets	4		28
Purchases of investments	Purchases of investments	(49)		(25)			Purchases of investments	(5)		(49)

Deconsolidation of subsidiary cash							Deconsolidation of subsidiary cash	(315)		—
Distributions from investments							Distributions from investments	70		3
Spectrum repack reimbursements	Spectrum repack reimbursements	14		24			Spectrum repack reimbursements	1		14

Other, net	Other, net	1		6			Other, net	—		(2)
Net cash flows used in investing activities	Net cash flows used in investing activities	$	(26)	$	(23)		Net cash flows used in investing activities	$	(266)	$	(26)

Cash flows (used in) from financing activities:
Cash flows used in financing activities:							Cash flows used in financing activities:
Proceeds from notes payable and commercial bank financing	Proceeds from notes payable and commercial bank financing	$	6	$	873		Proceeds from notes payable and commercial bank financing	$	—	$	6
Repayments of notes payable, commercial bank financing and finance leases	Repayments of notes payable, commercial bank financing and finance leases	(26)		(20)			Repayments of notes payable, commercial bank financing and finance leases	(7)		(26)

Dividends paid on Class A and Class B Common Stock	Dividends paid on Class A and Class B Common Stock	(15)		(18)			Dividends paid on Class A and Class B Common Stock	(18)		(15)

Repurchase of outstanding Class A Common Stock	Repurchase of outstanding Class A Common Stock	—		(176)			Repurchase of outstanding Class A Common Stock	(68)		—
Redemption of redeemable subsidiary preferred equity		—		(198)

Distributions to noncontrolling interests, net	Distributions to noncontrolling interests, net	(30)		(3)			Distributions to noncontrolling interests, net	(3)		(30)
Distributions to redeemable noncontrolling interests		(2)		(378)

Other, net	Other, net	(18)		(9)			Other, net	(6)		(20)
Net cash flows (used in) from financing activities		$	(85)	$	71
Net cash flows used in financing activities							Net cash flows used in financing activities	$	(102)	$	(85)

Operating Activities

Net cash flows ~~used in~~from operating activities increased during the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020. The increase is~~2021, primarily ~~related~~due to ~~higher~~lower payments for production and overhead costs, distributor rebate payments, and payments for sports rights as a result of the Deconsolidation, partially offset by a decrease in cash collections from ~~Distributors.~~Distributors as a result of the Deconsolidation, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within the Consolidated Financial Statements.

Investing Activities

Net cash flows used in investing activities increased during the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020. The increase is~~2021, primarily ~~related~~due to ~~lower spectrum repack reimbursements~~the Deconsolidation, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and ~~higher contributions to investments,~~Summary of Significant Accounting Policies within the Consolidated Financial Statements, partially offset by ~~lower capital expenditures and the sale of WDKA and KBSI during the first quarter of 2021.~~increased distributions from investments.

Financing Activities

Net cash flows ~~from~~used in financing activities ~~decreased~~increased during the three months ended March 31, ~~2021~~2022, when compared to the same period in ~~2020. The decrease is~~2021, primarily related to ~~lower proceeds from the issuance of debt during the first quarter of 2021 compared to the draw on the STG and DSG revolving credit facilities during the first quarter of 2020, offset by~~ the repurchase of Class A Common Stock during the ~~redemption~~current period, partially offset by a decrease in repayments of notes payable and commercial bank financing primarily as a result of the ~~Redeemable Subsidiary Preferred Equity,~~Deconsolidation, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and ~~distributions to~~Summary of Significant Accounting Policies within the ~~redeemable noncontrolling interests during the first quarter of 2020.~~Consolidated Financial Statements.

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In February and May ~~2021,~~2022, our Board of Directors declared a quarterly dividend of ~~$0.20~~$0.25 per ~~share.~~share, a 25% increase over 2021 dividends. Future dividends on our shares of common stock, if any, will be at the discretion of our Board of Directors and will depend on several factors including our results of operations, cash requirements and surplus, financial condition, covenant restrictions, and other factors that the Board of Directors may deem relevant.

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~~CONTRACTUAL CASH OBLIGATIONS~~

During the three months ended March 31, 2021, we entered into agreements which increased estimated contractual amounts owed for program rights and content for the remainder of 2021, years 2022-2023, 2024-2025, and 2026 and thereafter by $64 million, $159 million, $128 million, and $97 million, respectively, as of March 31, 2021.

~~As of March 31, 2021, there were no other material changes to our contractual cash obligations.~~

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There were no changes to critical accounting policies and estimates from those disclosed in Critical Accounting Policies and Estimates under Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

The impact of the COVID-19 outbreak and the war in Ukraine continues to create significant uncertainty and disruption in the global economy and financial markets. It is reasonably possible that these uncertainties will continue to impact our estimates related to, but not limited to, revenue recognition, goodwill and intangible assets, ~~sports programming rights,~~ and income taxes. As a result, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. See Distribution Revenue in Revenue Recognition ~~and~~ ~~Sports Programming Rights~~ under Note 1. Nature of Operations and Summary of Significant Accounting Policies within the Consolidated Financial Statements for a further discussion on how COVID-19 has impacted distribution ~~revenue and sports rights expense.~~revenue. Our estimates may further change in the future as the COVID-19 pandemic ~~continues,~~and the war in Ukraine continue, new events occur, and additional information emerges, and such changes are recognized or disclosed in our consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes from the quantitative and qualitative discussion about market risk previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures and Internal Control over Financial Reporting

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the design and effectiveness of our disclosure controls and procedures and our internal control over financial reporting as of March 31, ~~2021.~~2022.

The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The term "internal control over financial reporting," as defined in Rules 13a-15d-15(f) under the Exchange Act, means a process designed by, or under the supervision of our Chief Executive Officer and Chief Financial Officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles ~~(GAAP)~~("GAAP") and includes those policies and procedures that:

•pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that our receipts and expenditures are being made in accordance with authorizations of management or our Board of Directors; and

•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material adverse effect on our financial statements.

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Assessment of Effectiveness of Disclosure Controls and Procedures

Based on the evaluation of our disclosure controls and procedures as of March 31, ~~2021,~~2022, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, ~~2021,~~2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Limitations on the Effectiveness of Controls

Management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management’s override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are party to lawsuits and claims from time to time in the ordinary course of business. Actions currently pending are in various stages and no material judgments or decisions have been rendered by hearing boards or courts in connection with such actions.

See Litigation under Note 6. Commitments and Contingencies within ~~our~~the Consolidated Financial Statements for discussion related to certain pending lawsuits.

ITEM 1A. RISK FACTORS

As of the date of this report, there have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~

The following table summarizes repurchases of our stock in the quarter ended March 31, 2022:


Period	Total Number of Shares Purchased (a)	Average Price Per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (in millions)
Class A Common Stock: (b)
01/01/22 - 01/31/22	1,111,375	$	27.49	1,111,375	$	788
02/01/22 - 02/28/22	946,494	$	27.64	946,494	$	762
03/01/22 - 03/31/22	414,616	$	27.40	414,616	$	751

(a)All repurchases were made in open-market transactions.

(b)On August 4, 2020, the Board of Directors authorized an additional $500 million share repurchase authorization in addition to the previous repurchase authorization of $1 billion. There is no expiration date and currently, management has no plans to terminate this program. All shares repurchased during the quarter ended March 31, 2022 were repurchased under an SEC Rule 10b5-1 plan. As of March 31, 2022, the remaining authorization under the program was $751 million.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS


Exhibit Number						Description
10.14.1						~~Form~~Indenture, dated as of ~~Restricted Stock Award Agreement - February 2021 Grants.~~
10.2*						~~Form of Stock Appreciation Rights Agreement - February 2021 Grants.~~
10.3*						~~Amended and Restated Employment Agreement~~March 1, 2022, by and ~~between Sinclair Television~~among Diamond Sports Group, ~~Inc.~~LLC and ~~Robert Weisbord dated January 16, 2020.~~Diamond Sports Finance Company, as Issuers, and U.S. Bank Trust Company, National Association, as Trustee and Notes Collateral Agent.
31.1**						Certification by Christopher S. Ripley, as Chief Executive Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).
31.2**						Certification by Lucy Rutishauser, as Chief Financial Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).
32.1**						Certification by Christopher S. Ripley, as Chief Executive Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).
32.2**						Certification by Lucy Rutishauser, as Chief Financial Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).
101*						The Company's Consolidated Financial Statements and related Notes for the quarter ended March 31, ~~2021~~2022 from this Quarterly Report on Form 10-Q, formatted in iXBRL (Inline eXtensible Business Reporting Language).*
104						Cover Page Interactive Data File (included in Exhibit 101).

* Filed herewith.

** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized on the 10th day of May ~~2021.~~2022.


			SINCLAIR BROADCAST GROUP, INC.


			By:			/s/ David R. Bochenek
						David R. Bochenek
						Senior Vice President/Chief Accounting Officer
						(Authorized Officer and Chief Accounting Officer)

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	Three Months Ended March 31, 2020
			Sinclair Broadcast Group Shareholders
	Redeemable Noncontrolling Interests		Class A Common Stock			Class B Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total Equity
			Shares	Values		Shares	Values
BALANCE, December 31, 2019	$	1,078	66,830,110	$	1	24,727,682	$	0	$	1,011	$	492	$	(2)	$	192	$	1,694
Dividends declared and paid on Class A and Class B Common Stock ($0.20 per share)	—		—	—		—	—		—		(19)		—		—		(19)

Repurchases of Class A Common Stock	—		(9,957,297)	—		—	—		(176)		—		—		—		(176)
Class A Common Stock issued pursuant to employee benefit plans	—		1,479,684	—		—	—		29		—		—		—		29

Distributions to noncontrolling interests, net	—		—	—		—	—		—		—		—		(3)		(3)
Distributions to redeemable noncontrolling interests	(378)		—	—		—	—		—		—		—		—		—
Redemption of redeemable subsidiary preferred equity, net of fees	(198)		—	—		—	—		—		—		—		—		—
Net income	20		—	—		—	—		—		123		—		8		131
BALANCE, March 31, 2020	$	522	58,352,497	$	1	24,727,682	$	0	$	864	$	596	$	(2)	$	197	$	1,656


(in millions)
2021 (remainder)	$	1,233
2022	1,655
2023	1,608
2024	1,540
2025	1,420
2026 and thereafter	7,008
Total	$	14,464


	As of March 31, 2021		As of December 31, 2020
Balance Sheet Data:
Cash and cash equivalents	$	941	$	1,259
Total assets	$	13,132	$	13,382
Total debt (c)	$	12,540	$	12,551
Redeemable noncontrolling interests	$	188	$	190
Total deficit	$	(1,186)	$	(1,185)